UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
_X_ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended September 30, 2001.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from ___ to ___
COMMISSION FILE NUMBER 001-13950
CENTRAL PARKING CORPORATION
---------------------------
(Exact Name of Registrant as Specified in Its Charter)
TENNESSEE 62-1052916
--------- ----------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
2401 21st Avenue South,
Suite 200, Nashville, Tennessee 37212
---------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (615) 297-4255
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
Title of Each Class Name of each Exchange on which registered
------------------- -----------------------------------------
Common Stock $0.01 par Value New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
---
The aggregate market value of the Common Stock held by non-affiliates of the
registrant, based on the closing price of the Common Stock on the New York Stock
Exchange on December 19, 2001 was $684,767,443. For purposes of this response,
the registrant has assumed that its directors, executive officers, and
beneficial owners of 5% or more of its Common Stock are the affiliates of the
registrant.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date.
Class Outstanding at December 19, 2001
----- ------------------------------------
Common Stock, $0.01 par value 35,758,091
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive proxy statement for the Annual
Meeting of Shareholders to be held on February 9, 2002 are incorporated by
reference into Part III, items 10, 11, 12 and 13 of this Form 10-K.
CONTENTS:
Part I
Item 1. Business 3
Item 2. Properties 11
Item 3. Legal Proceedings 12
Item 4. Submission of Matters to a Vote of Security-Holders 12
Part II
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters 12
Item 6. Selected Consolidated Financial Data 13
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
Item 7.A Quantitative and Qualitative Disclosure about Market Risk 26
Item 8. Financial Statements and Supplementary Data 27
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 57
Part III
Item 10. Directors and Executive Officers 57
Item 11. Executive Compensation 57
Item 12. Security Ownership of Certain Beneficial
Owners and Management 57
Item 13. Certain Relationships and Related Transactions 57
Part IV.
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K 57
Signatures 59
Accountants' Consent 68
PART I
ITEM 1. BUSINESS
GENERAL
Central Parking Corporation ("Central Parking" or the "Company") is a
leading provider of parking and transportation management services. As of
September 30, 2001 Central Parking operated 4,038 parking facilities containing
approximately 1,530,000 spaces in 38 states, the District of Columbia, Canada,
Puerto Rico, Mexico, Chile, Venezuela, the United Kingdom, the Republic of
Ireland, Spain, Germany, Poland and Greece.
Central Parking operates multi-level parking facilities and surface lots.
It also provides parking consulting, shuttle, valet, parking meter enforcement,
and billing and collection services. Central Parking operates parking facilities
under three general types of arrangements: management contracts, leases, and fee
ownership. As of September 30, 2001, Central Parking operated 1,869 parking
facilities under management contracts and 1,950 parking facilities under leases.
In addition, the Company owned 219 parking facilities either independently or
through joint ventures.
PARKING INDUSTRY
The commercial parking services business is very fragmented, consisting of
a few national companies and approximately 1,000 small privately held local and
regional operators. Central Parking believes it has the opportunity to
consolidate portions of this fragmented, localized industry by using its
competitive advantages of scale, financial strength, technology and controls.
For the same reasons, Central Parking believes it is well-positioned to be
selected by municipal and other governmental entities to operate their parking
facilities and provide parking-related services as such entities consider
outsourcing and privatization.
During the 1980's, the high level of construction activity in the United
States resulted in a significant increase in the number of parking facilities.
Since that time, as construction activity has slowed, much of the growth of
certain parking service companies, including Central Parking, has been as a
result of take-aways from other parking companies. New construction and
acquisition of additional facilities are essential to growth for parking service
companies because of the limitations on growth in revenues of existing
operations. Although some growth in revenues from existing operations is
possible through redesign, increased operational efficiency, or increased
facility use and prices, such growth is ultimately limited by the size of a
facility and market conditions.
Management believes that most commercial real estate developers and
property owners view services such as parking as potential profit centers rather
than cost centers. These parties outsource parking operations to parking
management companies in an effort to maximize profits or leverage the original
rental value to a third-party lender. Parking management companies can increase
profits by using managerial skills and experience, operating systems, and
operating controls unique to the parking industry.
Management continues to view privatization of government operations and
facilities as an opportunity for the parking industry. Privatization in the
United Kingdom has provided significant expansion opportunities for private
parking companies. In the United States, several cities have awarded or are
considering awarding on-street parking enforcement and parking meter service
contracts to for-profit parking companies such as Central Parking. The Company
currently has contracts for parking meter collection and enforcement in
Charlotte, North Carolina; Richmond, Virginia; and Fort Myers, Florida.
GROWTH STRATEGY
Central Parking plans to continue to add facilities to its operations by
focusing its marketing efforts on adding facilities at the local level,
targeting real estate managers and developers with a national presence, pursuing
strategic acquisitions of other parking service operators, and expanding its
international operations. Following are the key elements of Central Parking's
growth strategy.
INCREASE MARKET PRESENCE
Central Parking continually seeks to establish and increase its operations
in new and existing markets through take-aways of competitors' contracts,
obtaining new management and lease contracts, entering into joint venture
arrangements, and selective purchases of parking facilities. Management believes
that Central Parking's relative size, financial strength and systems, and
technology give it a competitive advantage in winning new business and make it
an attractive partner for joint venture and other opportunities. In addition,
Central Parking believes that its performance-based compensation system, which
is designed to reward managers for increasing profitability in their respective
areas of responsibility, has been a key contributor to the Company's growth.
PURSUE STRATEGIC ACQUISITIONS
On October 1, 2001 the Company completed acquisitions of two separate
companies with parking operations in the southeast and western portions of the
United States. On that date, the Company also obtained a 70% interest in an
entity that manufactures automated pay stations. See Note 19 to the
Consolidated Financial Statements. Central Parking intends to continue to
pursue acquisition opportunities on a selective basis. Central Parking's
acquisition strategy is to focus on opportunities that enable Central Parking to
(i) become a stronger, more efficient provider in selected markets, (ii)
generate significant economies of scale and cost savings, and (iii) increase
cash flow. Cost savings typically result from the elimination of duplicative
management functions as well as from efficiencies resulting from implementing
Central Parking's systems and professional management techniques.
EXPAND INTERNATIONAL OPERATIONS
Management believes that there are significant international growth
opportunities, particularly for well-capitalized companies that are interested
in making significant investments in equipment and construction, either
independently or with foreign partners. Central Parking typically enters foreign
markets either through consulting projects or by forming joint ventures with
established local entities, both of which allow Central Parking to enter foreign
markets with reduced operating and investment risk. Central Parking currently
has operations in Canada, Puerto Rico, Mexico, Chile, Venezuela, the United
Kingdom, the Republic of Ireland, Spain, Germany, Poland and Greece.
OPERATING STRATEGY
Central Parking's primary objective is to increase the revenues and
profitability of its parking facilities through a variety of operating
strategies, including the following:
MAINTAIN STRICT COST MANAGEMENT AND CASH CONTROL
In order to provide competitively priced services, the Company must contain
costs. Managers are trained to analyze staffing and cost control issues, and
each facility is carefully tracked on a monthly basis to determine whether
financial results are within budgeted ranges. Because of the substantial
performance-based components of their compensation, managers are continuously
motivated to contain the costs of their operations. Strict cash control also is
critical to Central Parking and its clients. Central Parking's cash control
procedures are based on a ticketing system supervised by experienced managers
and include on-site spot checks, daily cash deposits, local audit functions and
managerial oversight and review.
EMPHASIZE SALES AND MARKETING EFFORTS
Central Parking's management is actively involved in developing and
maintaining business relationships and in exploring opportunities for growth.
Central Parking's marketing efforts are designed to expand its operations by
developing lasting relationships with major real estate developers and asset
managers, business and government leaders, and other clients. Central Parking
encourages its managers to pursue new opportunities at the local level while
simultaneously selectively targeting key clients and projects at a national
level.
LEVERAGE ESTABLISHED MARKET PRESENCE AND CORPORATE INFRASTRUCTURE
Central Parking has an established presence in multiple markets,
representing platforms from which it can build. Because of the relatively fixed
nature of corporate overhead and the resources that can be shared in specific
markets, Central Parking has the opportunity to increase its profit margins as
it grows its presence in established markets. General and administrative
expenses, as a percentage of revenue, were 9.5%, 9.8% and 10.6%, in fiscal 2001,
2000 and 1999, respectively.
EMPOWER LOCAL MANAGERS; PROVIDE CORPORATE SUPPORT
Central Parking has achieved what management believes is a successful
balance between centralized and decentralized management. Because its business
is dependent, to some extent, on personal relationships, Central Parking
provides its managers with a significant degree of autonomy in order to
encourage prompt and effective responses to local market demands. In conjunction
with this local operational authority, the Company provides, through its
corporate office, services that typically are not readily available to
independent operators such as management support, marketing and business
expertise, training, and financial and information systems. Central Parking
retains centralized control over those functions necessary to monitor service
quality and cash control integrity and to maximize operational efficiency.
Services performed at the corporate level include billing, quality improvement
oversight, financial and accounting functions, human resources, legal services,
policy and procedure development, systems design, and corporate acquisitions and
development.
The Company is managed based on segments administered by senior vice
presidents. These segments are generally organized geographically, with
exceptions depending on the needs of specific regions. See Note 18 to
Consolidated Financial Statements for financial information regarding the
Company's business segments.
UTILIZE PERFORMANCE-BASED COMPENSATION
Central Parking's performance-based compensation system rewards managers at
the general manager level and above for the profitability of their respective
areas of responsibility. Each person participating in the incentive program
generally receives a substantial portion of his or her compensation from this
performance-based compensation system.
MAINTAIN WELL-DEFINED PROFESSIONAL MANAGEMENT ORGANIZATION
In order to ensure professionalism and consistency in Central Parking's
operations, to provide a career path opportunity for its managers, and to
achieve a balance between autonomy and accountability, Central Parking has
established a highly structured management organization. Organized into six
levels, Central Parking has approximately 984 managers at September 30, 2001.
Central Parking recruits primarily college graduates or people with
previous parking services or hospitality industry experience, and requires that
they complete a formal training program. Management believes that the Company's
training program is a significant factor in Central Parking's success. New
managers are assigned to a particular facility where they are supervised as they
manage one to five employees. The management trainee program lasts approximately
one year and teaches a wide variety of skills, including organizational skills,
basic management techniques, and basic accounting. Upon successful completion of
this stage of the program, management trainees are promoted to facility manager
in charge of a particular parking facility. As facility managers, they report up
through the hierarchical structure of managers. As managers develop and gain
experience, they have the opportunity to assume expanded responsibility, to be
promoted to higher management levels and to increase the performance-based
component of their compensation. This well-defined structure provides a career
path that is designed to be an attractive opportunity for prospective new hires.
In addition, management believes the training and advancement program has
enabled Central Parking to instill a high level of professionalism in its
employees. A final important benefit of Central Parking's organizational
structure is that it has allowed Central Parking to balance localized autonomy
with accountability and centralized support and control.
AUTOMATE FACILITIES
Management believes that the Company's application of technology to its
operations represents a competitive advantage over smaller operators with more
limited resources. Central Parking has implemented computerized card tracking
and accounting systems in certain of its facilities and is experimenting with a
variety of automated settlement systems.
STRATEGICALLY EXPAND SERVICE OFFERINGS
Central Parking provides services that are complementary to parking
facility management, with a particular emphasis on consulting services. Other
ancillary services include parking meter enforcement services, on-street parking
services, car pooling coordination, shuttle van services, and transportation
management. These ancillary services do not constitute a significant portion of
Central Parking's revenues, but management believes that the provision of
ancillary services can be important in obtaining new business and preparing the
Company for future changes in the parking industry.
FOCUS ON RETENTION OF PATRONS
In order for the Company to succeed, its parking patrons must have a
positive experience at Company facilities. Accordingly, the Company stresses the
importance of having well lit, clean facilities and cordial employees. Each
facility manager has primary responsibility for the environment at the facility,
and is evaluated on his or her ability to retain parking patrons. The Company
also monitors customer satisfaction through customer surveys and "mystery
parker" programs.
MAINTAIN DISCIPLINED FACILITY SITE SELECTION ANALYSIS
In existing markets, the facility site selection process begins with
identification of a possible facility site and the analysis of projected
revenues and costs at the site by general managers and regional managers. The
managers then conduct an examination of a location's potential demand based on
traffic patterns and counts, area demographics, and potential competitors. Pro
forma financial statements are then developed and a Company representative will
meet with the property owner to discuss the terms and structure of the
agreement.
The Company seeks to distinguish itself from its competitors by combining a
reputation for professional integrity and quality management with operating
strategies designed to increase the revenues of parking operations for its
clients. The Company's clients include some of the nation's largest owners and
developers of mixed-use projects, major office building complexes, airport
terminals, sports stadiums, hotels and toll roads. Parking facilities operated
by the Company include, among others, certain terminals operated by BAA Heathrow
International Airport (London), the Prudential Center (Boston), Cinergy Field
(Cincinnati), Turner Field (Atlanta), Coors Field (Denver), and various parking
facilities owned by the Hyatt and Westin hotel chains, the Rouse Company, Faison
Associates, May Department Stores, Equity Office Properties, TrizecHahn, Jones
Lang LaSalle, Simon Property Group, Millenium Partners, Shorenstein and Crescent
Real Estate. None of these clients accounted for more than 5% of the Company's
total revenues for fiscal year 2001.
ACQUISITIONS
The Company's acquisition strategy focuses primarily on acquisitions that
will enable Central Parking to become a more efficient and cost-effective
provider in selected markets. Central Parking believes it can recognize
economies of scale by making acquisitions in markets where the Company already
has a presence, which allows Central Parking to reduce the overhead cost of the
acquired company by consolidating its management with that of Central Parking.
In addition, Central Parking seeks acquisitions in attractive new markets.
Management believes acquisitions are an effective means of entering new markets,
thereby quickly obtaining both operating presence and management personnel.
Central Parking also believes it generally can improve acquired operations by
applying its operating strategies and professional management techniques. The
Company's acquisitions over the last three years, all of which were accounted
for under the purchase method of accounting, are as follows: Allied Parking
("Allied") in October 1998, November 1998 and April 1999; Sacramento Parking
Group in July 1999; and Arizona Stadium LLC in October 1999. Additionally, in
October 2001 the Company acquired USA Parking Systems, Inc. and Universal Park
Holdings, as well as a 70% interest in Lexis Systems, Inc. For additional
information regarding recent acquisitions, see Notes 2 and 19 of the
Consolidated Financial Statements and Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations".
MERGER WITH ALLRIGHT
On March 19, 1999, the Company completed a merger with Allright Holdings,
Inc. ("Allright"), one of the largest parking services companies in the United
States with revenues of approximately $217.2 million for the fiscal year ended
June 30, 1998. As of September 30, 1998, Allright operated approximately 2,315
facilities containing approximately 550,000 parking spaces, including 72
facilities in Canada containing approximately 30,000 parking spaces. As of
September 30, 1998, Allright, directly or indirectly, owned 195 facilities,
leased 1,473 facilities, and operated 647 facilities through management
contracts. The merger added new market presence in 25 cities and expanded
market presence in approximately 70 cities.
Under the merger, approximately 7.0 million shares of Company common stock,
and approximately 0.5 million options and warrants to purchase such Company
common stock were exchanged for all of the outstanding shares of common stock
and options and warrants to purchase common stock of Allright. The transaction
constituted a tax-free reorganization and has been accounted for as a
pooling-of-interests. Accordingly, prior period financial information presented
herein has been restated to include the combined results of operations,
financial position and cash flows of Allright as if it had been part of Central
Parking from the date of Allright's inception, October 31, 1996. See Note 2 to
the Consolidated Financial Statements and Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations" for additional
information regarding the merger with Allright.
In connection with the Allright merger, the Antitrust Division of the
United States Department of Justice (the "Antitrust Division") filed a complaint
in U.S. District Court for the District of Columbia seeking to enjoin the merger
on antitrust grounds. Central Parking and Allright entered into a settlement
agreement with the Antitrust Division on March 16, 1999, under which Central and
Allright agreed to divest a total of 74 parking facilities in 18 cities,
representing approximately 18,000 parking spaces. See "Legal Proceedings" for
additional information regarding the settlement agreement entered into with the
Antitrust Division.
SALES AND MARKETING
Central Parking's sales and marketing efforts are designed to expand its
operations by developing and maintaining relationships with major real estate
developers and asset managers, business and government leaders, and other
clients. Central Parking encourages its managers to pursue new opportunities at
the local level while simultaneously selectively targeting key clients and
projects at a national level.
LOCAL
At the local level, Central Parking's sales and marketing efforts are
decentralized and directed towards identifying new expansion opportunities
within a particular city or region. Managers are trained to develop the business
contacts necessary to generate new opportunities and to monitor their local
markets for take-away and outsourcing opportunities. Central Parking provides
its managers with a significant degree of autonomy in order to encourage prompt
and effective responses to local market demands, which is complemented by
management support and marketing training through Central Parking's corporate
offices. In addition, a manager's compensation is dependent, in part, upon his
or her success in developing new business. By developing business contacts
locally, Central Parking's managers often get the opportunity to bid on projects
when asset managers and property owners are dissatisfied with current operations
and also learn in advance of possible new projects.
NATIONAL
At the national level, Central Parking's marketing efforts are undertaken
primarily by upper-level management, which targets developers, governmental
entities, the hospitality industry, mixed-use projects, and medical facilities.
These efforts are directed at operations that generally have national name
recognition, substantial demand for parking related services, and the potential
for nationwide growth. For example, Central Parking's current clients include,
among other national real estate companies and hotel chains, the Rouse Company,
Millenium Partners, Faison Associates, Equity Office Properties, Shorenstein,
May Department Stores, Crescent Real Estate, TrizecHahn, Jones Lang LaSalle,
Westin Hotels, and Hyatt Hotels. Management believes that providing
high-quality, efficient services to such companies will lead to additional
opportunities as those clients continue to expand their operations. Management
believes outsourcing by parking facility owners will continue to be a source for
additional facilities, and management believes the Company's global presence,
experience and reputation with large real estate asset managers give it a
competitive advantage in this area.
INTERNATIONAL EXPANSION
Central Parking's international operations began in the early 1990's with
the formation of an international division. The Company typically enters foreign
markets either through consulting projects or by forming joint ventures with
established local entities. Consulting projects allow Central Parking to
establish a presence and evaluate the prospects for growth of a given market
without investing a significant amount of capital. Likewise, forming joint
ventures with local partners allows Central Parking to enter new foreign markets
with reduced operating and investment risks.
Operations in London began in 1991 with a single consulting agreement and,
as of September 30, 2001, have grown to 232 facilities in the United Kingdom
including two terminals at Heathrow International Airport and parking meter
enforcement and ticketing services for eight local governments that have
privatized these services. Central Parking began expansion into Mexico in July
1994 by forming a joint venture with Fondo Opcion, an established Mexican
developer, and as of September 30, 2001, operates 113 facilities in Mexico.
Central Parking also operates 123 facilities in Canada, 3 facilities in Spain, 1
in Poland, 12 in Chile, 14 in Venezuela, and 1 in Greece. The Company also
operates on-street parking services in the United Kingdom, Germany and the
Republic of Ireland. In 1996, Central Parking acquired a 50% equity interest in
a joint venture, which presently operates 15 facilities in Germany. In order to
manage its international expansion, the Company has allocated responsibilities
for international operations to the President of International Operations, a
newly-created position.
OPERATING ARRANGEMENTS
Central Parking operates parking facilities under three general types of
arrangements: management contracts, leases, and fee ownership. The following
table sets forth certain information regarding the number of managed, leased, or
owned facilities as of the specified dates:
SEPTEMBER 30,
2001 2000 1999
----- ----- -----
Managed 1,869 2,025 2,096
Leased 1,950 2,190 2,455
Owned 219 239 259
----- ----- -----
Total 4,038 4,454 4,810
===== ===== =====
The general terms and benefits of these types of arrangements are discussed
below. Financial information regarding these types of agreements is set forth
in Item 7, Management's Discussion and Analysis of Financial Condition and
Results of Operations.
MANAGEMENT CONTRACTS
Management contract revenues consist of management fees (both fixed and
performance based) and fees for ancillary services such as insurance,
accounting, equipment leasing, and consulting. The cost of management contracts
includes insurance premiums and claims and other indirect overhead. The
Company's responsibilities under a management contract as a facility manager
include hiring, training, and staffing parking personnel, and providing
collections, accounting, record keeping, insurance, and facility marketing
services. In general, Central Parking is not responsible under its management
contracts for structural, mechanical, or electrical maintenance or repairs, or
for providing security or guard services or for paying property taxes. In
general, management contracts are for terms of one to three years and are
renewable for successive one-year terms, but are cancelable by the property
owner on short notice. With respect to insurance, the Company's clients have the
option of obtaining liability insurance on their own or having Central Parking
provide insurance as part of the services provided under the management
contract. Because of the Company's size and claims experience, management
believes it can purchase such insurance at lower rates than the Company's
clients can generally obtain on their own. Accordingly, Central Parking
historically has generated profits on the insurance provided under its
management contracts.
LEASES
The Company's leases generally require the payment of a fixed amount of
rent, regardless of the profitability of the parking facility. In addition, many
leases also require the payment of a percentage of gross revenues above
specified threshold levels. Generally speaking, leased facilities require a
longer commitment and a larger capital investment to the Company and represent a
greater risk than managed facilities but provide a greater opportunity for
long-term growth in revenues and profits. The cost of parking includes rent,
payroll and related benefits, depreciation, maintenance, insurance, and general
operating expenses. Under its leases, the Company is typically responsible for
all facets of the parking operations, including pricing, utilities, and ordinary
and routine maintenance, but is generally not responsible for structural,
mechanical or electrical maintenance or repairs, or property taxes. Lease
arrangements are typically for terms of three to ten years, with a renewal term,
and generally provide for increases in base rent based on indices, such as the
Consumer Price Index, or on pre-determined amounts.
FEE OWNERSHIP
Ownership of parking facilities, either independently or through joint
ventures, typically requires a larger capital investment and greater risk than
managed or leased facilities but provides maximum control over the operation of
the parking facility and the greatest profit potential of the three types of
operating arrangements. All owned facility revenues flow directly to the
Company, and the Company has the potential to realize benefits of appreciation
in the value of the underlying real estate if the property is sold. The
ownership of a parking facility brings the Company complete responsibility for
all aspects of the property, including all structural, mechanical or electrical
maintenance or repairs.
JOINT VENTURES
The Company seeks joint venture partners who are established local or
regional developers pursuing financing alternatives for development projects.
Joint ventures typically involve a 50% interest in a development where the
parking facility is a part of a larger multi-use project, allowing the Company's
joint venture partners to benefit from a capital infusion to the project. Joint
ventures offer the revenue growth potential of ownership with a partial
reduction in capital requirements. The Company has interests in joint ventures
that own or operate parking facilities located throughout the United States as
well as Mexico, Germany, Poland, Greece and Chile.
DBE PARTNERSHIPS
Central Parking is a party to a number of disadvantaged business enterprise
partnerships. These are generally partnerships formed by Central Parking and a
disadvantaged businessperson to manage a facility. Central Parking generally
owns 60% to 75% of the partnership interests in each partnership and typically
receives management fees before partnership distributions are made to the
partners.
COMPETITION
The parking industry is fragmented and highly competitive. The Company
faces direct competition for additional facilities to manage, lease, or own and
the facilities currently operated by the Company face competition for employees
and customers. The Company competes with a variety of other companies to add new
operations. Although there are relatively few large, national parking companies
that compete with the Company, developers, hotel companies, and national
financial services companies have the potential to compete with parking
companies. Municipalities and other governmental entities also operate parking
facilities which compete with Central Parking. The Company also faces
competition from regional and local parking companies and from owner-operators
of facilities who are potential clients for the Company's management services.
Construction of new parking facilities near the Company's existing leased or
managed facilities could adversely affect the Company's business.
Management believes that it competes for clients based on rates charged for
services; ability to generate revenues and control expenses for clients; ability
to anticipate and respond to industry changes; range and quality of services;
and ability to expand operations. The Company believes it has a reputation as a
leader in the industry and as a provider of high quality services. The Company
also is one of the largest companies in the parking industry and is not limited
to a single geographic region. The Company has the financial strength to make
capital investments as an owner or joint venture partner that smaller or more
leveraged companies cannot make. The Company's size also has allowed it to
centralize administrative functions that give the decentralized managerial
operations cost-efficient support. Moreover, the Company has obtained broad
experience in managing and operating a wide variety of facilities over the past
30 years. Additionally, the Company is able to attract and retain quality
managers through its incentive compensation system that directly rewards
successful sales and marketing efforts and places a premium on profitable
growth.
SEASONALITY
The Company's business is subject to a modest amount of seasonality.
Historically, the Company's results have been strongest during the quarters that
end on December 31, and June 30. The Company attributes the relative weakness
of the quarters that end on March 31, and September 30 to, among other factors,
winter weather and summer vacations. There can be no assurance that this trend
will continue in future years. For further discussion of this issue see
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
INSURANCE
The Company purchases comprehensive liability insurance covering certain
claims that occur at parking facilities it owns, leases or manages. The primary
amount of such coverage is $1 million per occurrence and $2 million in the
aggregate per facility. In addition, the Company purchases umbrella/excess
liability coverage. The Company's various liability insurance policies have
deductibles of up to $250,000 that must be met before the insurance companies
are required to reimburse the Company for costs and liabilities relating to
covered claims. As a result, the Company is, in effect, self-insured for all
claims up to the deductible levels. The Company purchases a worker's
compensation policy with a per claim deductible of $250,000. The Company
utilizes a third party administrator to process and pay filed claims. The
Company also purchases group health insurance with respect to full-time Company
employees, whether such persons are employed at owned, leased, or managed
facilities and purchases workers' compensation insurance for all employees.
Because of the size of the operations covered, the Company purchases
insurance policies at prices that management believes represent a discount to
the prices that would be charged to parking facility owners on a stand-alone
basis. Pursuant to its management contracts, the Company charges its customers
for insurance at rates it believes approximate market rates. In each case, the
Company's clients have the option of purchasing their own policies, provided the
Company is named as an additional insured; however, many of the Company's
clients historically have chosen to purchase such insurance through the Company.
A reduction in the number of clients that purchase insurance through the
Company, however, could have a material adverse effect on the operating earnings
of the Company. In addition, a material increase in insurance costs due to an
increase in the number of claims, higher claim costs or higher premiums paid by
the Company could adversely affect the profit associated with insurance charges
pursuant to management contracts and could have a material adverse effect on the
operating earnings of the Company.
REGULATION
The Company's business is subject to various federal, state and local laws
and regulations, and both municipal and state authorities sometimes directly
regulate parking facilities. The facilities in New York City are, for example,
subject to certain governmental restrictions concerning numbers of cars,
pricing, and certain prohibited practices. The Company is also affected by laws
and regulations (such as zoning ordinances) that are common to any business that
owns real estate and by regulations (such as labor and tax laws) that affect
companies with a large number of employees. In addition, several state and local
laws have been passed in recent years that encourage car-pooling and the use of
mass transit. The most recent example is the restrictions imposed by the city
of New York in the wake of the September 11 terrorist attacks, including a
requirement for passenger cars entering certain bridges and tunnels to have more
than one occupant during the morning rush hour. Such laws have adversely
affected the Company's revenue and could continue to do so in the future.
Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real property may be
liable for the costs of removal or remediation of hazardous or toxic substances
on, under or in such property. Such laws typically impose liability without
regard to whether the owner or operator knew of, or was responsible for, the
presence of such hazardous or toxic substances. In connection with the ownership
or operation of parking facilities, the Company may be potentially liable for
any such costs. Although Central Parking is currently not aware of any material
environmental claims pending or threatened against it, there can be no assurance
that a material environmental claim will not be asserted against the Company.
The cost of defending against claims of liability, or of remediating a
contaminated property, could have a material adverse effect on the Company's
financial condition or results of operations.
The Company also is subject to various federal and state antitrust and
consumer laws and regulations including the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, which requires filings in connection with certain
mergers and acquisitions. In connection with the Allright merger, Central
Parking and Allright entered into a settlement agreement with the Antitrust
Division of the U.S. Department of Justice which required, among other things,
the divestiture of certain parking facilities. See "Merger With Allright."
Various other governmental regulations affect the Company's operation of
parking facilities, both directly and indirectly, including the Americans with
Disabilities Act ("ADA"). Under the ADA, all public accommodations, including
parking facilities, are required to meet certain federal requirements related to
access and use by disabled persons. For example, the ADA requires parking
facilities to include handicapped spaces, headroom for wheelchair vans,
attendants' booths that accommodate wheelchairs, and elevators that are operable
by disabled persons. Management believes that the parking facilities the Company
owns and operates are in substantial compliance with these requirements.
EMPLOYEES
As of September 30, 2001, the Company employed approximately 18,800
individuals, including 15,400 full-time and 3,400 part-time employees.
Approximately 5,500 U.S. employees are represented by labor unions. Various
union locals represent parking attendants and cashiers at the New York City
facilities. Other cities in which some of the Company's employees are
represented by labor unions are Washington, D.C., Miami, Philadelphia, San
Francisco, Jersey City, Newark, Atlantic City, Pittsburgh, White Plains, San
Juan, Puerto Rico, and Chicago. The Company frequently is engaged in collective
bargaining negotiations with various union locals but has not experienced any
labor strikes. Management believes that the Company's employee relations are
good.
SERVICE MARKS AND TRADEMARKS
The Company has registered the names CPC, Central Parking System and
Central Parking Corporation, and its logo with the United States Patent Office
and has the right to use them throughout the United States except in the Chicago
and Atlantic City areas where two other companies have the exclusive right to
use the name "Central Parking." The Company also owns registered trademarks for
Square Industries, Kinney System, Allied Parking and Allright Parking and
operates various parking locations under those names. The Company uses the name
"Chicago Parking System" in Chicago and "CPS Parking" in Seattle and Milwaukee.
The Company has registered the name "Control Plus" and its symbol in London and
has registered that name and symbol in association with its on-street parking
activities in Richmond, Virginia. The Company has registered, or intends to
register, its name and logo in various international locations where it does
business.
FOREIGN AND DOMESTIC OPERATIONS
For information about the Company's foreign and domestic operations refer
to Note 18 of the Consolidated Financial Statements.
RECENT DEVELOPMENTS
The recession and the September 11 tragedy have adversely impacted the
Company's financial results and are expected to affect future results as well.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations - Results of Operations" for more information.
ITEM 2. PROPERTIES
The Company's facilities, as of September 30, 2001, are organized into 7
segments which are subdivided into 18 regions. As detailed below. Each region
is supervised by a regional manager who reports directly to one of the senior
vice presidents. Regional managers oversee four to six general managers who each
supervise the Company's operations in a particular city. The following table
summarizes certain information regarding the Company's facilities as of
September 30, 2001
NUMBER OF TOTAL
SEGMENT CITIES LOCATIONS MANAGED LEASED OWNED SPACES
-------------------------------------------------------- --------- ------- ------ ----- ---------
SEGMENT 1
Western Las Vegas, Los Angeles, Orange County, Phoenix,
San Diego 184 95 85 4 86,363
Denver Albuquerque, Denver, Houston Airport 141 75 54 12 77,095
San Francisco Oakland, Sacramento, Salt Lake City, San Francisco,
Seattle, Vancouver 196 96 98 2 42,171
--------- ------- ------ ----- ---------
TOTAL SEGMENT 1 521 266 237 18 205,629
--------- ------- ------ ----- ---------
SEGMENT 2
New York New Jersey, New York City, Philadelphia,
Poughkeepsie, Stamford 540 246 278 16 230,890
Boston Boston, Hartford, Manchester, Providence 160 59 94 7 79,881
--------- ------- ------ ----- ---------
TOTAL SEGMENT 2 700 305 372 23 310,771
--------- ------- ------ ----- ---------
SEGMENT 3
Florida Jacksonville, Miami, Orlando, Tampa, West Palm Beach 206 102 99 5 90,355
Atlanta Atlanta, Charleston (SC), Charleston (WV), Charlotte,
Chattanooga, Columbia, Lynchburg, Roanoke 244 112 110 22 88,288
--------- ------- ------ ----- ---------
TOTAL SEGMENT 3 450 214 209 27 178,643
--------- ------- ------ ----- ---------
SEGMENT 4
Nashville Baton Rouge, Birmingham, Jackson, Knoxville,
Lexington, Louisville, Mobile, New Orleans, Nashville 426 161 236 29 124,227
Houston Austin, Dallas, El Paso, Ft. Worth, Houston, San Antonio 356 130 194 32 108,033
Cincinnati Cincinnati, Columbus 112 32 65 15 70,816
--------- ------- ------ ----- ---------
TOTAL SEGMENT 4 894 323 495 76 303,076
--------- ------- ------ ----- ---------
SEGMENT 5
Washington, DC Baltimore, Cleveland, Pittsburgh, Richmond, Washington 271 128 129 14 84,424
Puerto Rico San Juan 28 21 7 -- 12,191
--------- ------- ------ ----- ---------
TOTAL SEGMENT 5 299 149 136 14 96,615
--------- ------- ------ ----- ---------
SEGMENT 6
St. Louis Kansas City, Little Rock, Memphis, Oklahoma City,
Omaha, Peoria, St. Louis, Tulsa 353 165 160 28 85,976
Chicago Chicago, Detroit, Indianapolis, Milwaukee, Minneapolis 222 101 104 17 83,640
East Binghamton, Buffalo, Rochester, Syracuse, Wilkes-Barre 120 47 59 14 48,800
--------- ------- ------ ----- ---------
TOTAL SEGMENT 6 695 313 323 59 218,416
--------- ------- ------ ----- ---------
INTERNATIONAL
Europe Germany, Greece, Ireland, London, Poland, Spain 256 182 74 -- 92,365
Latin America Chile, Mexico, Venezuela 139 70 69 -- 80,476
Canada Calgary, Montreal, Ottawa, Toronto 84 47 35 2 43,578
--------- ------- ------ ----- ---------
TOTAL INTERNATIONAL 479 299 178 2 216,419
--------- ------- ------ ----- ---------
TOTAL 4,038 1,869 1,950 219 1,529,569
========= ======= ====== ===== =========
PERCENTAGE
OF TOTAL
SEGMENT SPACES
-----------
SEGMENT 1
Western
5.7%
Denver 5.0
San Francisco
2.8
-----------
13.5
-----------
SEGMENT 2
New York
15.1
Boston 5.2
-----------
20.3
-----------
SEGMENT 3
Florida 5.9
Atlanta
5.8
-----------
11.7
-----------
SEGMENT 4
Nashville
8.1
Houston 7.1
Cincinnati 4.6
-----------
19.8
-----------
SEGMENT 5
Washington, DC 5.5
Puerto Rico 0.8
-----------
6.3
-----------
SEGMENT 6
St. Louis
5.6
Chicago 5.5
East 3.2
-----------
14.3
-----------
INTERNATIONAL
Europe 6.0
Latin America 5.3
Canada 2.8
-----------
14.1
-----------
TOTAL 100.0%
===========
The Company's facilities include both surface lots and structured parking
facilities (garages). Approximately 17% of the Company's owned parking
properties are in structured parking facilities, with the remainder in surface
lots. Management believes the Company's owned facilities generally are in good
condition and adequate for its present needs.
ITEM 3. LEGAL PROCEEDINGS
The ownership of property and provision of services to the public entails
an inherent risk of liability. Although the Company is engaged in routine
litigation incidental to its business, there is no legal proceeding to which the
Company is a party, which, in the opinion of management, will have a material
adverse effect upon the Company's financial condition, results of operations, or
liquidity. The Company carries liability insurance against certain types of
claims that management believes meets industry standards; however, there can be
no assurance that any pending future legal proceedings (including any related
judgments, settlements or costs) will not have a material adverse effect on the
Company's financial condition, liquidity or results of operations.
In connection with the merger of Allright Holdings, Inc. with a subsidiary
of the Company, the Antitrust Division of the United States Department of
Justice (the "Antitrust Division") filed a complaint in U.S. District Court for
the District of Columbia seeking to enjoin the merger on antitrust grounds. In
addition, the Company received notices from several states, including Tennessee,
Texas, Illinois, and Maryland, that the attorneys general of those states were
reviewing the merger from an antitrust perspective. Several of these states
also requested certain information relating to the merger and the operations of
Central Parking and Allright in the form of civil investigative demands.
Central Parking and Allright entered into a settlement agreement with the
Antitrust Division on March 16, 1999, under which the two companies divested a
total of 74 parking facilities in 18 cities, representing approximately 18,000
parking spaces. None of the states that reviewed the transaction from an
antitrust perspective became a party to the settlement agreement with the
Antitrust Division. The settlement agreement provides that Central Parking and
Allright may not operate any of the divested facilities for a period of two
years following the divestiture of such facility.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
No matter was submitted to a vote of the Company's security-holders during
the fourth quarter of the fiscal year ended September 30, 2001.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) The Registrant's Common Stock is listed on the NYSE under the symbol "CPC."
The following table sets forth, for the periods indicated, the high and low
sales prices for the Company's Common Stock as reported by the NYSE.
HIGH LOW
------ ------
FISCAL 2001
First Quarter $22.81 $15.75
Second Quarter 23.31 16.80
Third Quarter 18.70 17.05
Fourth Quarter 20.40 12.93
Twelve months 23.31 12.93
FISCAL 2000
First Quarter $29.81 $14.50
Second Quarter 20.50 14.38
Third Quarter 27.88 19.56
Fourth Quarter 25.00 17.63
Twelve months 29.81 14.38
(b) There were, as of September 30, 2001, approximately 6,500 holders of the
Company's Common Stock, based on the number of record holders of the
Company's common stock and an estimate of the number of individual
participants represented by security position listings.
(c) Since April 1997, Central Parking has distributed a quarterly cash dividend
of $0.015 per share of Central Parking common stock. The Company's Board
currently intends to declare a cash dividend each quarter depending on
Central Parking's profitability and future capital requirements. Central
Parking reserves the right, however, to retain all or a substantial portion
of its earnings to finance the operation and expansion of Central Parking's
business. As a result, the future payment of dividends will depend upon,
among other things, the Company's profitability, capital requirements,
financial condition, growth, business opportunities, and other factors that
the Central Parking Board may deem relevant, including restrictions in any
then-existing credit agreement. The Company's existing credit facility
contains certain covenants including those that require the Company to
maintain certain financial ratios, restrict further indebtedness, and limit
the amount of dividends payable; however, the Company does not believe
these restrictions limit its ability to pay currently anticipated cash
dividends. In addition, Central Parking Finance Trust (the "Trust"), a
Delaware statutory business trust, of which all of the common stock is
owned by the Company, issued preferred securities (the "Trust Issued
Preferred Securities") which prohibit the payment of dividends on the
Central Parking common stock if the quarterly distributions on the Trust
Issued Preferred Securities are not made for any reason. See Note 10 of the
Consolidated Financial Statements.
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
On March 19, 1999, Central Parking completed a merger with Allright
Holdings, Inc. ("Allright"). The transaction constituted a tax-free
reorganization and has been accounted for as a pooling-of-interests.
Accordingly, Central Parking's consolidated financial statements have been
restated to reflect the combined results of operations, financial position and
cash flows of Central Parking and Allright as if Allright had been part of
Central Parking since Allright's inception date of October 31, 1996. Prior to
the consummation of the merger, Allright's fiscal year end was June 30. In
recording the business combination, Allright's consolidated financial statements
as of June 30, 1997 and for the eight months then ended, and as of June 30, 1998
and for the year then ended, have been combined with Central Parking's
consolidated financial statements for the fiscal years ended September 30, 1997
and 1998, respectively. There were no material transactions between Central
Parking and Allright prior to the Merger. Certain reclassifications have been
made to Allright's historical financial statements to conform to Central
Parking's presentation.
Set forth below are selected consolidated financial data of the Company for
each of the periods indicated. Certain of the statement of earnings, per share,
and balance sheet data were derived from the audited consolidated financial
statements of the Company. All of the information set forth below should be read
in conjunction with the Company's Consolidated Financial Statements and the
Notes thereto and with Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
Amounts in thousands, except per share data
YEAR ENDED SEPTEMBER 30,
------------------------
2001 2000 1999 1998 1997
--------- --------- --------- --------- ---------
STATEMENT OF EARNINGS DATA:
Revenues:
Parking $603,416 $628,666 $639,086 $534,573 $295,692
Management contract 101,743 102,263 91,386 65,826 43,245
--------- --------- --------- --------- ---------
Total revenues 705,159 730,929 730,472 600,399 338,937
Expenses:
Total before merger costs 633,607 649,020 651,827 528,747 298,511
Merger costs -- 3,747 40,970 -- --
Property-related gains (losses), net (7,255) 935 3,006 (639) 3,118
Operating earnings 64,297 79,097 40,681 71,013 43,544
Percentage of total revenues 9.1% 10.8% 5.6% 11.8% 12.8%
Interest income (expense), net $(14,761) $(20,100) $(20,312) $(24,555) $(15,922)
Dividends on company-obligated mandatorily
redeemable convertible securities of a subsidiary trust (5,886) (6,012) (5,926) (3,247) --
Equity in partnership and joint venture earnings 5,075 10,260 5,233 5,246 4,238
Earnings before income taxes, minority interest, extraordinary
items and cumulative effect of accounting change 48,725 63,245 19,676 48,457 31,860
Income taxes 19,112 23,277 12,380 20,373 13,011
Income tax percentage of earnings before income tax 39.2% 36.8% 62.9% 42.0% 40.8%
Minority interest, net of tax $ (3,502) $ (3,334) $ (2,612) $ (1,939) $ (163)
Extraordinary item, net of tax -- (195) (1,002) -- (1,032)
Cumulative effect of accounting change, net of tax (258) -- -- -- --
Net earnings 25,853 36,439 3,682 26,145 17,654
Percentage of total revenues 3.7% 5.0% 0.5% 4.4% 5.2%
5-YEAR
2001 VS. 2000 GROWTH
INCREASE (DECREASE) RATE
--------------------- -------
STATEMENT OF EARNINGS DATA:
Revenues:
Parking $ (25,250) (4.0)% 19.5%
Management contract (520) (0.5) 23.8
------------- ------- ------
Total revenues (25,770) (3.5) 20.1
Expenses:
Total before merger costs (15,413) (2.4) 20.7
Merger costs (3,747) (100.0) NM
Property-related gains (losses), net (8,190) (875.9) NM
Operating earnings (14,800) (18.7) 10.2
Percentage of total revenues NM NM NM
Interest income (expense), net $ 5,339 26.6 (1.9)
Dividends on company-obligated mandatorily
redeemable convertible securities of a subsidiary trust 126 2.1 NM
Equity in partnership and joint venture earnings (5,185) (50.5) 4.6
Earnings before income taxes, minority interest, extraordinary
items and cumulative effect of accounting change (14,520) (23.0) 11.2
Income taxes (4,165) (17.9) 10.1
Income tax percentage of earnings before income tax NM NM NM
Minority interest, net of tax $ (168) (5.0) 115.3
Extraordinary item, net of tax (195) (100.0) NM
Cumulative effect of accounting change, net of tax (258) NM NM
Net earnings (10,586) (29.1) 10.0
Percentage of total revenues NM NM NM
YEAR ENDED SEPTEMBER 30, 2001 VS 2000
------------------------
2001 2000 1999 1998 1997 INCREASE (DECREASE)
------- ------- ------- ------- ------- --------------------
PER SHARE DATA:
Earnings before extraordinary item and cumulative
effect of accounting change - basic $ 0.73 $ 1.01 $ 0.13 $ 0.76 $ 0.62 $ (0.28) (27.7)%
Earnings before extraordinary item and cumulative
effect of accounting change - diluted $ 0.73 $ 0.99 $ 0.13 $ 0.74 $ 0.61 $ (0.26) (26.3)
Basic weighted average common shares 35,803 36,365 36,349 34,618 30,070 (562) (1.5)
Diluted weighted average common shares 36,015 36,851 37,056 35,312 30,512 (836) (2.3)
Dividends per common share $ 0.06 $ 0.06 $ 0.06 $ 0.05 $ 0.05 $ -- --
Net book value per common share outstanding
at September 30 10.66 10.19 9.44 9.36 5.28 0.47 4.6
Merger cost per diluted common share -- 0.07 0.81 -- -- (0.07) (100.0)
SEPTEMBER 30,
-------------
2001 2000 1999 1998 1997
--------- ----------- ----------- --------- ---------
BALANCE SHEET DATA:
Cash and cash equivalents $ 41,849 $ 43,214 $ 53,669 $ 39,495 $ 17,308
Working capital (76,695) (89,252) (30,659) (30,897) (17,520)
Goodwill, net 250,630 264,756 277,800 288,170 65,428
Total assets 986,881 1,022,305 1,064,577 954,022 598,693
Long-term debt and capital lease obligations,
less current portion 223,135 253,535 337,481 283,319 73,725
Company-obligated mandatorily redeemable convertible
securities of subsidiary holding solely parent debentures 110,000 110,000 110,000 110,000 --
Shareholders' equity 381,446 370,257 347,119 341,914 173,114
2001 VS 2000
INCREASE (DECREASE)
--------------------
BALANCE SHEET DATA:
Cash and cash equivalents $ (1,365) (3.2)%
Working capital 12,557 14.1
Goodwill, net (14,126) (5.3)
Total assets (35,424) (3.5)
Long-term debt and capital lease obligations,
less current portion (30,400) (12.0)
Company-obligated mandatorily redeemable convertible
securities of subsidiary holding solely parent debentures -- --
Shareholders' equity 11,189 3.0
YEAR ENDED SEPTEMBER 30, 2001 VS 2000
------------------------
2001 2000 1999 1998 1997 INCREASE (DECREASE)
-------- -------- -------- -------- -------- --------------------
OTHER DATA:
Depreciation and amortization $46,966 $46,235 $43,131 $28,674 $13,547 $ 731 1.6%
Employees (2) 18,800 16,200 16,700 17,450 14,300 2,600 16.0
Number of shareholders (2) 6,500 7,300 10,325 8,100 7,000 (800) (11.0)
Market capitalization (in millions) (1) (4) $ 501 $ 720 $ 1,075 $ 1,840 $ 1,000 $ (219) (30.4)
Return on equity (3) 6.9% 10.2% 1.1% 10.2% 14.1% NM NM
(1) Reflects the recapitalization, initial and subsequent public offering of
shares, and subsequent stock splits of the Company.
(2) Reflects information as of September 30 of the respective fiscal year.
(3) Reflects return on equity calculated using fiscal year net earnings divided
by average shareholders' equity for the fiscal year.
(4) Based on number of shares outstanding and closing market price as of
September 30.
NM Not meaningful
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The Company operates parking facilities under three types of arrangements:
leases, fee ownership, and management contracts. Parking revenues consist of
revenues from leased and owned facilities. Cost of parking relates to both
leased and owned facilities and includes rent, payroll and related benefits,
depreciation (if applicable), maintenance, insurance, and general operating
expenses. Parking revenues in fiscal 2001 decreased by $25.3 million, to $603.4
million from $628.7 million in 2000. The Company experienced a net decline in
the number of leased and owned locations in 2001 of 260 (246 additional leased
and owned locations offset by 483 lost or sold locations and 23 locations that
were converted to management agreements or consolidated with existing
locations).
Parking revenues from owned properties amounted to $71.6 million, $73.2
million and $66.9 million for the years ended September 30, 2001, 2000 and 1999,
respectively. Owned properties parking revenues, as a percentage of all parking
revenues, amounted to 11.9%, 11.6%, and 10.5% in 2001, 2000 and 1999
respectively.
Parking revenues from leased facilities amounted to $531.8 million, $555.5
million, and $572.2 million for the years ended September 30, 2001, 2000 and
1999, respectively. Leased properties parking revenues, as a percentage of all
parking revenues, accounted for 88.1%, 88.4% and 89.5% in 2001, 2000 and 1999,
respectively.
Management contract revenues include revenues from managed facilities. In
fiscal year 2001, management contract revenues decreased 0.5% to $101.7 million.
The number of managed facilities actually declined during fiscal 2001 by 156
locations (268 added offset by 424 lost). Management contract revenues amounted
to $102.3 million and $91.4 million for the years ended September 30, 2000 and
1999, respectively.
YEAR ENDED SEPTEMBER 30,
------------------------
HISTORICAL FINANCIAL SUMMARY ($MILLIONS) 2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------ ------- ------- ------- ------- -------
Parking revenues $603.4 $628.7 $639.1 $534.6 $295.7
% Growth over prior year (4.0%) (1.6%) 19.6% 80.8% 170.6%
Management contract revenues $101.7 $102.2 $ 91.4 $ 65.8 $ 43.2
% Growth over prior year (0.5%) 11.9% 38.8% 52.2% 32.9%
Total revenues $705.2 $730.9 $730.5 $600.4 $338.9
% Growth over prior year (3.5%) 0.1% 21.7% 77.1% 139.0%
Cost of parking and management contracts $554.8 $565.0 $562.9 $456.7 $259.8
% of total revenues 78.7% 77.3% 77.1% 76.1% 76.7%
General and administrative expenses, excluding merger costs $ 66.8 $ 71.9 $ 77.3 $ 63.7 $ 37.0
% of total revenues 9.5% 9.8% 10.6% 10.6% 10.9%
Goodwill and non-compete amortization $ 12.0 $ 12.1 $ 11.6 $ 8.3 $ 1.7
% of total revenues 1.7% 1.7% 1.6% 1.4% 0.5%
Depreciation and amortization - excluding goodwill and non-compete $ 34.9 $ 34.1 $ 31.5 $ 20.4 $ 11.9
Merger costs -- 3.7 41.0 -- --
% of total revenue -- 0.5% 5.6% -- --
Property-related gains (losses), net $ (7.3) $ 0.9 $ 3.0 $ (0.6) $ 3.1
Operating earnings 64.3 79.1 40.7 71.0 43.5
% of total revenues 9.1% 10.8% 5.6% 11.8% 12.8%
Interest income (expense), net $(14.8) $(20.1) $(20.3) $(24.6) $(15.9)
Dividends on company-obligated mandatorily redeemable securities
of subsidiary trust holding solely parent debentures (5.9) (6.0) (5.9) (3.2) --
Equity in partnerships and joint venture earnings 5.1 10.3 5.2 5.2 4.2
Earnings before extraordinary item and cumulative effect of accounting change 26.1 36.6 4.7 26.1 18.7
% of total revenues 3.7% 5.0% 0.6% 4.4% 5.5%
A summary of the facilities operated domestically and internationally by Central
Parking as of September 30, 2001 is as follows:
PERCENT
MANAGED LEASED OWNED TOTAL OF TOTAL SPACES
------- ------ ----- ----- --------- ---------
Total U.S. and Puerto Rico 1,570 1,733 217 3,520 87.2% 1,309,167
------- ------ ----- ----- --------- ---------
United Kingdom 179 53 -- 232 5.8 78,498
Canada 47 74 2 123 3.0 47,561
Mexico (1) 58 55 -- 113 2.8 65,660
Germany (1) 2 13 -- 15 0.4 6,794
Venezuela 4 10 -- 14 0.3 10,214
Chile (1) 8 4 -- 12 0.3 4,602
Ireland -- 4 -- 4 0.1 500
Spain -- 3 -- 3 0.1 1,693
Poland (1) -- 1 -- 1 0.0 380
Greece 1 -- -- 1 0.0 4,500
------- ------ ----- ----- --------- ---------
Total foreign 299 217 2 518 12.8 220,402
------- ------ ----- ----- --------- ---------
Total facilities 1,869 1,950 219 4,038 100.0% 1,529,569
======= ====== ===== ===== ========= =========
(1) Operated through unconsolidated 50% owned joint ventures
The table below sets forth certain information regarding the Company's managed,
leased and owned facilities in the periods indicated.
YEAR ENDED SEPTEMBER 30,
------------------------
2001 2000 1999
------- ------- ------
Managed Facilities (1):
Beginning of year 2,025 2,096 1,937
------- ------- ------
Acquired or merged during year -- -- 18
Added during year 268 198 354
Deleted during year (424) (269) (213)
------- ------- ------
End of year 1,869 2,025 2,096
------- ------- ------
Renewal Rate (3) 81.5% 88.3% 90.8%
Leased Facilities (1):
Beginning of year 2,190 2,455 2,565
------- ------- ------
Acquired or merged during year -- -- 1
Added during year 243 159 225
Deleted during year (483) (424) (336)
------- ------- ------
End of year 1,950 2,190 2,455
------- ------- ------
Owned Facilities (1)(2):
Beginning of year 239 259 261
------- ------- ------
Purchased during year 3 -- 7
Closed or sold during year (23) (20) (9)
------- ------- ------
End of year 219 239 259
------- ------- ------
Total facilities (end of year) 4,038 4,454 4,810
======= ======= ======
Net growth in number of facilities:
Managed (7.7%) (3.4%) 8.2%
Leased (11.0%) (10.8%) (4.3%)
Owned (8.4%) (7.7%) (3.3%)
Total facilities (9.3%) (7.4%) 1.0%
(1) Includes 114, 97, and 48 managed; 81, 64 and 54 leased; and 6, 6 and 16
owned properties operated under joint venture agreements at September 30,
2001, 2000 and 1999, respectively.
(2) Includes the Company's corporate headquarters in Nashville, Tennessee.
(3) The renewal rate calculation is 100% minus lost locations divided by the
sum of the beginning of the year, acquired and added during the year for
management locations.
MERGER WITH ALLRIGHT
On March 19, 1999, Central Parking completed a merger with Allright
Holdings, Inc. ("Allright"), pursuant to which approximately 7.0 million shares
of Central Parking stock, and approximately 0.5 million options and warrants to
purchase such common stock of Central Parking were exchanged for all of the
outstanding shares of common stock and options and warrants to purchase common
stock of Allright. The transaction constituted a tax-free reorganization and has
been accounted for as a pooling-of-interests. Accordingly, prior period
financial statements presented have been restated to include the combined
results of operations, financial position and cash flows of Allright as if it
had been part of Central Parking from the date of Allright's inception, October
31, 1996. See Notes 1 and 2 of the Consolidated Financial Statements.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, information
derived from the Company's consolidated financial statements expressed as a
percentage of total revenues.
YEAR ENDED SEPTEMBER 30,
------------------------
2001 2000 1999
------ ------ ------
Parking revenues 85.6% 86.0% 87.5%
Management contract revenues 14.4 14.0 12.5
------ ------ ------
Total revenues 100.0 100.0 100.0
Cost of parking and management contracts 78.7 77.3 77.1
General and administrative expenses, excluding merger costs 9.5 9.8 10.6
Goodwill and non-compete amortization 1.7 1.7 1.6
Merger costs -- 0.5 5.6
Property-related gains (losses), net (1.0) 0.1 0.5
------ ------ ------
Operating earnings 9.1 10.8 5.6
Interest income (expense), net (2.1) (2.7) (2.8)
Dividends on company-obligated mandatorily redeemable securities of
subsidiary trust holding solely parent debentures (0.8) (0.8) (0.8)
Equity in partnership and joint venture earnings 0.7 1.4 0.7
------ ------ ------
Earnings before income taxes, minority interest, extraordinary item and
cumulative effect of accounting change 6.9 8.7 2.7
Income taxes 2.7 3.2 1.7
------ ------ ------
Earnings before minority interest, extraordinary item and
cumulative effect of accounting change 4.2% 5.5% 1.0%
====== ====== ======
YEAR ENDED SEPTEMBER 30, 2001 COMPARED TO YEAR ENDED SEPTEMBER 30, 2000
Parking revenues are comprised of revenue from leased and owned facilities.
Parking revenues in fiscal 2001 decreased to $603.4 million from $628.7 million
in fiscal 2000, a decrease of $25.3 million, or 4.0%. The decrease is due to
several factors. In addition to a net reduction of 260 leased and owned
facilities and a general economic slowdown during fiscal 2001, management
estimates that the Company lost $1.4 million in revenues in the second quarter
due to severe weather in the northeast and $5.0 million in revenues in the
fourth quarter due to the effects of the September 11 terrorist attacks. The
general economic slowdown and the lingering impact of the September 11 attacks,
particularly on the Company's operations in New York City are expected to
continue to have an adverse effect on the Company's revenues in fiscal 2002.
Management contract revenues also decreased slightly in fiscal 2001 to
$101.7 million from $102.3 million in fiscal 2000, a decrease of $0.5 million,
or 0.5%. Revenues from foreign operations increased to $39.5 million for fiscal
2001, compared to $33.5 million for fiscal 2000, an increase of $6.0 million or
17.9%. The increase was driven by the addition of Venezuela, the Athens, Greece
airport, and several on-street contracts in the United Kingdom.
Cost of parking in fiscal 2001 decreased to $513.6 million from $528.7
million in fiscal 2000, a decrease of $15.1 million, or 2.9%. Net rent expense
decreased in fiscal 2001 to $294.2 million from $307.4 million in fiscal 2000, a
decrease of $13.2 million, or 4.3%. Payroll expenses decreased during fiscal
2001 to $111.0 million from $117.7 million during fiscal 2000, a decrease of
$6.7 million, or 5.7%. The decrease in both rent and payroll expense can be
attributed to the fewer number of leased locations in operation during fiscal
2001. Cost of parking as a percentage of parking revenues increased to 85.1% in
fiscal 2001 from 84.1% in fiscal 2000. The increase is due to the inability of
the Company to fully adjust the fixed expense component of its cost structure to
match its lower parking revenues.
Cost of management contracts in fiscal 2001 increased to $41.2 million from
$36.3 million in fiscal 2000, an increase of $4.9 million, or 13.6%. The cost
of management contracts, as a percentage of management contract revenues,
increased to 40.5% in fiscal 2001 from 35.5% in fiscal 2000. The increases are
primarily a result of higher costs associated with the Company's healthcare
insurance programs as well as an increase in the cost of administering certain
payroll related activities on behalf of management contract clients.
General and administrative expenses decreased to $66.8 million in 2001,
from $71.9 million in 2000, a decrease of $5.1 million, or 7.1%. The decrease
was primarily a result of technology enhancements and cost savings plans
implemented in fiscal 2001. General and administrative expenses decreased as a
percentage of total revenue to 9.5% in 2001, from 9.8% in 2000 as a result of
the aforementioned actions.
Amortization expense of goodwill and non-compete agreements was $12.0
million in fiscal 2001, down slightly from $12.1 million in fiscal 2000.
The Company incurred $3.7 million of Allright-related merger costs during
the first and second quarters of fiscal 2000. Included in these costs are
approximately $1.3 million in professional fees, $1.1 million in severance and
employment-related payments, and $1.3 million in various other miscellaneous
expenses. No such costs were incurred in fiscal 2001.
Net property-related losses for fiscal 2001 were $7.3 million, compared to
net property-related gains of $0.9 million in fiscal 2000. The Company recorded
impairment charges totaling $8.3 million during fiscal 2001, compared to $4.8
million in fiscal 2000, Of these charges, $5.5 million was attributable to
properties where the carrying value of the goodwill, contract rights, and lease
rights was no longer supportable by projected future cash flows and $2.8 million
related to leasehold improvements on such properties in fiscal 2001. In
addition, the Company incurred $7.7 million in lease termination costs in fiscal
2001, compared to $0.4 million in fiscal 2000, as it aggressively pursued
opportunities to exit unfavorable lease agreements. The impairment and lease
termination costs were offset by $8.8 million of gains from sales of owned
properties during fiscal 2001, compared to $6.1 million in fiscal 2000.
Interest income in fiscal 2001 decreased to $5.8 million from $6.9 million
in fiscal 2000 due to a decline in market interest rates. Interest expense
decreased in fiscal 2001 as well, to $20.6 million from $27.0 million in fiscal
2000 due to the aforementioned decrease in market interest rates, as well as a
$32.8 million reduction in the Company's outstanding debt balance during the
year. The Company's variable rate debt was positively impacted during fiscal
2001 by the decline in interest rates. The weighted-average balance of debt
outstanding during fiscal 2001 was $289.6 million at a weighted average rate of
6.5%, compared to a weighted average balance of $348.3 million at a weighted
average rate of 7.4% during fiscal 2000.
Dividends on Company-obligated mandatorily redeemable convertible
securities of a subsidiary trust decreased to $5.9 million in fiscal 2001 from
$6.0 million in fiscal 2000.
Equity in partnership and joint venture earnings decreased to $5.1 million
in fiscal 2001 from $10.3 million in fiscal 2000. The decrease is due to a $5.0
million gain on the sale of a property in fiscal 2000 recognized by a
partnership in which the Company was a limited partner. Such transaction
resulted from the general partner's decision to sell the property as allowed by
the partnership agreement.
The Company's effective income tax rate before minority interest,
extraordinary items and cumulative effect of accounting change was 39.2% in
fiscal 2001 as compared to 36.8% in fiscal 2000. The increase in the rate is
primarily attributable to an increase in nondeductible goodwill as a percentage
of taxable income. Additionally, the Company recorded a one-time benefit of
approximately $1.5 million during fiscal 2000 relating to the reduction of
certain federal and state net operating loss valuation allowances that had been
established by Allright. No such benefit was recognized in fiscal 2001.
Management believes that it will be able to utilize these net-operating losses
to offset future income before their statutory expiration dates as a result of
various tax planning strategies that the Company implemented during the year.
The Company's effective tax rate is expected to be approximately 35.0% before
nonrecurring items for fiscal year 2002.
YEAR ENDED SEPTEMBER 30, 2000 COMPARED TO YEAR ENDED SEPTEMBER 30, 1999
Parking revenues are comprised of revenue from leased and owned facilities.
Parking revenues in fiscal 2000 decreased to $628.7 million from $639.1 million
in fiscal 1999, a decrease of $10.4 million, or 1.6%. The decrease is primarily
attributable to the fact that the Company operated 285 fewer leased and owned
facilities at the end of fiscal 2000 as compared to the end of fiscal 1999.
Despite the net decrease in managed facilities, management contract revenues
increased in fiscal 2000 to $102.3 million from $91.4 million in fiscal 1999, an
increase of $10.9 million, or 11.9%. The increase in management contract
revenues is due to the high-volume nature of the managed facilities added during
fiscal 2000 and the timing of additions and deletions during fiscal 2000 and
1999. Revenues from foreign operations remained the same for fiscal 2000 and
fiscal 1999, at $33.5 million.
Cost of parking in fiscal 2000 decreased to $528.7 million from $535.2
million in fiscal 1999, a decrease of $6.5 million, or 1.2%. Net rent expense
decreased in fiscal 2000 to $307.4 million from $311.4 million in fiscal 1999, a
decrease of $4.0 million, or 1.3%. Payroll expenses decreased during fiscal
2000 to $117.7 million from $119.2 million during fiscal 1999, a decrease of
$1.5 million, or 1.3%. The decrease in both rent and payroll expense can be
attributed to the fewer number of leased locations in operation during fiscal
2000. Cost of parking as a percentage of parking revenues increased to 84.1% in
fiscal 2000 from 83.7% in fiscal 1999. The increase is due to the inability of
the Company to adjust the fixed expense component of its cost structure to match
its lower parking revenues.
Cost of management contracts in fiscal 2000 increased to $36.3 million from
$27.7 million in fiscal 1999, an increase of $8.6 million, or 30.7%. The cost
of management contracts, as a percentage of management contract revenues,
increased to 35.5% in fiscal 2000 from 30.4% in fiscal 1999. The increases are
primarily a result of higher costs associated with the Company's healthcare
insurance programs as well as an increase in the cost of administering certain
payroll related activities on behalf of management contract clients.
General and administrative expenses decreased to $71.9 million in 2000,
from $77.3 million in 1999, a decrease of $5.4 million, or 6.9%. The decrease
was primarily a result of reduced payroll expenses resulting from the closure of
Allright's corporate headquarters and the elimination of duplicative positions
created by the Allright merger at the Company's regional and city offices.
General and administrative expenses decreased as a percentage of total revenue
to 9.8% in 2000, from 10.6% in 1999 due to the lower payroll costs.
Amortization expense of goodwill and non-compete agreements increased to
$12.1 million in fiscal 2000 from $11.6 million in fiscal 1999, an increase of
$0.5 million. This increase was primarily attributable to a non-compete
agreement with an executive from one of the entities acquired by the Company
that was entered into in the first quarter of fiscal 2000.
The Company incurred $3.7 million of Allright-related merger costs during
the first and second quarters of fiscal 2000. Included in these costs are
approximately $1.3 million in professional fees, $1.1 million in severance and
employment-related payments, and $1.3 million in various other miscellaneous
expenses. The Company recorded $41.0 million of Allright-related merger costs
during the last three quarters of fiscal 1999. Included in these costs are
approximately $20.7 million of professional fees, comprised of investment
banking, legal, accounting, and consulting fees; $11.3 million of
employment-related expenses; $7.0 million related to the restructuring agreement
with the limited partner of Edison Parking Management, L.P.; and $2.0 million in
travel, supplies, printing, and other out of pocket costs.
Net property-related gains decreased in fiscal 2000 to $0.9 million from
$3.0 million in fiscal 1999. The decrease of $2.1 million was due primarily to
an increase in impairment charges recognized during fiscal 2000.
Interest income in fiscal 2000 increased slightly to $6.9 million from $6.6
million in fiscal 1999. Though the Company reduced its outstanding debt by
approximately $59.9 million during fiscal 2000, interest expense remained
unchanged from the prior year at $27.0 million. The Company's variable rate
debt was negatively impacted during fiscal 2000 by a general rise in interest
rates. The weighted-average balance of debt outstanding during fiscal 2000 was
$348.3 million at a weighted average rate of 7.4%, compared to a weighted
average balance of $334.3 million at a weighted average rate of 8.1% during
fiscal 1999. The Company's fiscal 2000 results do not reflect the full benefit
of the aforementioned $59.9 million reduction in outstanding debt since $39.3
million of the reduction occurred during the Company's fourth quarter.
Dividends on Company-obligated mandatorily redeemable convertible
securities of a subsidiary trust increased to $6.0 million in fiscal 2000 from
$5.9 million in fiscal 1999.
Equity in partnership and joint venture earnings increased to $10.3 million
in fiscal 2000 from $5.2 million in fiscal 1999. The increase is due to a $5.0
million gain on the sale of a property recognized by a partnership in which the
Company was a limited partner. Such transaction resulted from the general
partner's decision to sell the property as allowed by the partnership agreement.
The Company's effective income tax rate before minority interest and
extraordinary items was 36.8% in fiscal 2000 as compared to 62.9% in fiscal
1999. The decrease in the rate is primarily attributable to nondeductible
merger costs incurred during the prior year. The Company recorded a one-time
benefit of approximately $1.5 million during fiscal 2000 relating to the
reduction of certain federal and state net operating loss valuation allowances
that had been established by Allright. Management believes that it will be able
to utilize these net-operating losses to offset future income before their
statutory expiration dates as a result of various tax planning strategies that
the Company implemented during the year.
QUARTERLY RESULTS
The Company experienced fluctuations in its quarterly net earnings during
fiscal 2001 due to unusually harsh winter weather in the second quarter and the
terrorist attacks in New York City and Washington, D.C. during the fourth
quarter resulting in an estimated loss of revenues of $1.4 million and $5.0
million, respectively. Both situations had a direct impact on operating earnings
due to the relatively fixed nature of the Company's cost structure (primarily
rent and payroll) which cannot be readily adjusted for short-term declines in
parking revenue. The Company also experienced fluctuations in its quarterly net
earnings during fiscal 2000 due to merger costs incurred in the first and second
quarters and the recognition of intermittent property-related gains or losses.
Additionally, the Company has and may continue to experience fluctuations in
revenues and related expenses due to acquisitions, pre-opening costs, travel and
transportation patterns affected by weather and calendar related events, and
local and national economic conditions. The Company's concentration of parking
facilities in the northeastern and mid-Atlantic part of the United States,
continues to expose the Company to the risk of negative financial fluctuations
that may result from severe winter weather and other local or regional factors.
Additionally, the Company services the parking for a number of sports stadiums
and arenas and can be impacted by the relative degree of success of various
sports teams and strikes. The following table sets forth certain quarterly
statements of earnings data for the eight fiscal quarters preceding the end of
the fiscal year and the percentage of net revenues represented by the line items
presented (except in the case of per share amounts). The quarterly statement of
earnings data set forth below was derived from unaudited financial statements of
the Company and includes all adjustments, consisting only of normal recurring
adjustments, which the Company considers necessary for a fair presentation
thereof.
Amounts in thousands, except per share data
2001 FISCAL YEAR
DECEMBER 31 (A) MARCH 31 JUNE 30 SEPTEMBER 30
--------------- ----------------- ----------------- -----------------
Total revenues $177,565 100.0% $174,034 100.0% $179,145 100.0% $174,415 100.0%
Property related gains (losses), net 2,777 1.6 (2,296) (1.3) (3,058) (1.7) (4,678) (2.7)
Operating earnings 25,501 14.4 16,196 9.3 16,009 8.9 6,591 3.8
Earnings before cumulative effect
of accounting change 11,681 6.6 6,735 3.9 6,737 3.8 958 0.5
Earnings before cumulative effect
of accounting change per share - basic $ 0.32 $ 0.19 $ 0.19 $ 0.03
Earnings before cumulative effect
of accounting change per share-diluted $ 0.32 $ 0.19 $ 0.19 $ 0.03
2000 FISCAL YEAR
DECEMBER 31 MARCH 31 JUNE 30 SEPTEMBER 30
---------------- ---------------- ----------------- -----------------
Total revenues $185,333 100.0% $182,651 100.0% $186,366 100.0% $176,579 100.0%
Property related gains (losses), net 1,758 0.9 1,331 0.7 (918) (0.5) (1,236) (0.7)
Operating earnings 20,170 10.9 18,183 10.0 23,804 12.8 16,940 9.6
Earnings before extraordinary item 8,446 4.6 7,380 4.0 14,781 7.9 6,027 3.4
Earnings before extraordinary item
per share - basic $ 0.23 $ 0.20 $ 0.41 $ 0.17
Earnings before extraordinary item
per share-diluted $ 0.23 $ 0.20 $ 0.40 $ 0.16
(a) Includes retroactive effect of adoption of Staff Accounting Bulletin 101 in
the second quarter of fiscal 2001.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities for fiscal 2001 was $46.4
million, a decrease of $54.0 million from net cash provided by operating
activities of $100.4 million during the same period in fiscal 2000. The primary
factors which contributed to this change were decreases in management accounts
payable and income taxes payable of $12.9 million and $1.1 million,
respectively, and an increase in other assets of $10.1 million compared to an
increase in net income taxes payable and a decrease in other assets of $10.3
million and $2.7 million, respectively, in the prior year. Also contributing to
the decrease in operating cash flow was a reduction in net earnings of $10.6
million from the prior year.
Net cash provided by investing activities was $1.2 million for fiscal 2001,
compared to net cash of $17.0 million used in investing activities during fiscal
2000. The change primarily resulted from a reduction of $22.6 million of
purchases of property, equipment and leasehold improvements in fiscal 2001
compared to fiscal 2000.
Net cash used by financing activities for fiscal 2001 was $49.2 million, a
net decrease of $44.6 million from fiscal 2000. The decrease was primarily
caused by a decrease in the net amount of repayments of outstanding debt. The
Company reduced outstanding debt by $32.8 million during fiscal 2001 (repayment
of $55.6 million of notes payable, partially offset by net borrowings of $22.5
million under its revolving credit agreement and $0.3 million of notes issued to
acquire contract rights) compared to net debt repayments of $76.3 million in
fiscal 2000.
On March 19, 1999, the Company established a new credit facility (the
"Credit Facility") providing for an aggregate availability of up to $400 million
consisting of a five-year $200 million revolving credit facility including a
sub-limit of $25 million for standby letters of credit, and a $200 million
five-year term loan. The Credit Facility bears interest at LIBOR plus a grid
based margin dependent upon Central Parking achieving certain financial ratios.
The amount outstanding under the Credit Facility as of September 30, 2001 was
$238.0 million with a weighted average interest rate of 4.1%, including the
principal amount of the term loan of $125.0 million which is being repaid in
quarterly payments of $12.5 million through March 2004. The Credit Facility
contains covenants including those that require the Company to maintain certain
financial ratios, restrict further indebtedness and limit the amount of
dividends paid. The aggregate availability under the Credit Facility was $59.6
million at September 30, 2001, which is net of $27.4 million of stand-by letters
of credit.
The Credit Facility contains covenants including those that require the
Company to maintain certain financial ratios, restrict further indebtedness and
limit the amount of dividends paid. On December 28, 1999, the Company entered
into an amendment and waiver to the Credit Facility agreement relating to the
waiver of non-compliance with certain loan covenants at September 30, 1999. This
amendment and waiver contained, among other things, amendment fees of $700
thousand, which are being amortized over the life of the Credit Facility. The
grid-based interest rate margin was not affected by the amendment and continues
to be based upon the Company achieving certain revised financial ratios.
On February 14, 2000, the Company entered into an amendment and restatement
to the Credit Facility agreement primarily to allow the Company to repurchase up
to $50 million in outstanding shares of its common stock. This amendment and
restatement required the Company to pay an amendment fee of $681 thousand, which
is being amortized over the life of the Credit Facility. Interest rates were not
affected by this amendment.
The Company is required to continue maintaining the aforementioned
financial covenants under the Credit Facility as of the end of each fiscal
quarter. Due to a decline in revenues resulting primarily from the recession and
the September 11 tragedy, the Company may not be in compliance with one or more
of these covenants as of the end of the first or second quarters of fiscal 2002.
As a result, the Company has begun discussions with its lender group regarding
potential amendments to its Credit Facility. These amendments would, among other
things, waive or amend the financial covenants and would likely increase the
Company's cost of funds under its Credit Facility by approximately 100 to 175
basis points. In addition, the Company is evaluating several financing
alternatives, including sale/leaseback opportunities, mortgage financing and
repurchase of a portion of its convertible preferred stock.
Depending on the timing and magnitude of the Company's future investments
(either in the form of leased or purchased properties, joint ventures, or
acquisitions), the working capital necessary to satisfy current obligations is
anticipated to be generated from operations and Central Parking's credit
facility over the next twelve months. In the ordinary course of business,
Central Parking is required to maintain and, in some cases, make capital
improvements to the parking facilities it operates. However, as of September 30,
2001, Central Parking had no material outstanding commitments for capital
improvements expenditures. If Central Parking identifies investment
opportunities requiring cash in excess of Central Parking's cash flows and the
existing credit facility, Central Parking may seek additional sources of
capital, including seeking to amend the credit facility to obtain additional
indebtedness. The Allright Registration Rights Agreement, as noted in "Risk
Factors", provides certain limitations and restrictions upon Central Parking's
ability to issue new shares of Central Parking common stock. Until certain
shareholders of Central Parking have received at least $350 million from the
sale of Central Parking common stock in either registered offerings or
otherwise, Central Parking cannot sell any shares of its common stock on its own
behalf, subject to certain exceptions. While Central Parking does not expect
this limitation to affect its working capital needs, it could have an impact on
Central Parking's ability to complete significant acquisitions. The current
market value of Central Parking common stock also could have an impact on
Central Parking's ability to complete significant acquisitions or raise
additional capital.
INTERNATIONAL FOREIGN CURRENCY EXPOSURE
The Company operates wholly-owned subsidiaries in the United Kingdom,
Canada and Spain. Total revenues from wholly-owned foreign operations amounted
to 5.6%, 4.6% and 4.6% of total revenues for the years ended September 30, 2001,
2000 and 1999, respectively. Additionally, the Company operates through joint
ventures in Germany, Poland, Chile, and Mexico. The Company intends to invest in
foreign leased or owned facilities, usually through joint ventures, and may
become increasingly exposed to foreign currency fluctuations. The Company, in
limited circumstances, has denominated contracts in U.S. dollars to limit
currency exposure. Presently, the Company has limited exposure to foreign
currency risk and has no hedge programs related to such risk. The Company
anticipates implementing a hedge program if such risk materially increases. For
the year ended September 30, 2001, revenues from the United Kingdom and Canada
operations represented 61.4% and 28.5%, respectively, of total revenues
generated by foreign operations, excluding earnings from joint ventures.
IMPACT OF INFLATION AND CHANGING PRICES
The primary sources of revenues to the Company are parking revenues from
owned and leased locations and management contract revenue (net of expense
reimbursements) on managed parking facilities. The Company believes that
inflation has had a limited impact on its overall operations for fiscal years
ended September 30, 2001, 2000 and 1999.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS
No. 133 established reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts. Under SFAS No. 133,
the Company recognizes all derivatives as either assets or liabilities, measured
at fair value, in the statement of financial position. In June 2000, SFAS No.
138 "Accounting for Certain Derivative Instruments and Certain Hedging
Activities, an Amendment of FASB Statement No. 133" was issued clarifying the
accounting for derivatives under the new standard.
On October 1, 2000, the Company prospectively adopted the provisions of
SFAS No. 133 and SFAS No. 138, which resulted in the recording of a net
transition loss of $380 thousand, net of related income taxes of $253 thousand,
in accumulated other comprehensive loss. Further, the adoption of SFAS No. 133
and SFAS No. 138 resulted in the Company reducing derivative instrument assets
by $280 thousand and recording $353 thousand of derivative instrument
liabilities.
At September 30, 2001, the Company's derivative financial instruments
consist of interest rate caps with a combined notional amount of $75 million and
interest rate swaps with a combined notional amount of $38 million that
effectively convert an equal portion of its debt from a floating rate to a fixed
rate. The Company's purpose for holding such instruments is to hedge its
exposure to cash flow fluctuations due to changes in market interest rates.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB
101). The Company adopted SAB 101 during the quarter ended March 31, 2001 as a
change in accounting principle retroactive to October 1, 2000. Adoption of SAB
101 required the Company to change the timing of recognition of
performance-based revenues on certain management contracts. The cumulative
effect of this accounting change was a loss of $429 thousand ($258 thousand, net
of tax) as of October 1, 2000. Adoption of SAB 101 resulted in an increase in
management contract revenues of $47 thousand for the year ended September 30,
2001.
In July 2001, the FASB issued SFAS No. 141, Business Combinations, and SFAS
No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. SFAS No. 141 also specifies criteria which intangible
assets acquired in a purchase method business combination must meet to be
recognized and reported apart from goodwill. SFAS No. 142 requires that goodwill
and intangible assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually in accordance with the
provisions of SFAS No. 142. SFAS No. 142 also requires that intangible assets
with definite useful lives be amortized over their respective estimated useful
lives to their estimated residual values, and reviewed for impairment in
accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of.
The Company was required to adopt the provisions of SFAS No. 141
immediately. SFAS No. 142 must be adopted by October 1, 2002, but may be
adopted as of October 1, 2001. The Company intends to elect this early
adoption. SFAS No. 142 requires that the Company evaluate its existing
intangible assets and goodwill that were acquired in a prior purchase business
combination, and to make any necessary reclassifications in order to conform
with the new criteria in SFAS No. 141 for recognition apart from goodwill. Upon
adoption of SFAS No. 142, the Company will be required to reassess the useful
lives and residual values of all intangible assets acquired in purchase business
combinations, and make any necessary amortization period adjustments by the end
of the first interim period after adoption. In addition, to the extent an
intangible asset is identified as having an indefinite useful life, the Company
will be required to test the intangible asset for impairment in accordance with
the provisions of SFAS No. 142 within the first interim period. Any impairment
loss will be measured as of the date of adoption and recognized as the
cumulative effect of a change in accounting principle in the first interim
period.
In connection with the transitional goodwill impairment evaluation, SFAS
No. 142 will require the Company to perform an assessment of whether there is an
indication that goodwill is impaired as of the date of adoption. To accomplish
this the Company must identify its reporting units and determine the carrying
value of each reporting unit by assigning the assets and liabilities, including
the existing goodwill and intangible assets, to those reporting units as of the
date of adoption. The Company will then have up to six months from the date of
adoption to determine the fair value of each reporting unit and compare it to
the reporting unit's carrying amount. To the extent a reporting unit's carrying
amount exceeds its fair value, an indication exists that the reporting unit's
goodwill may be impaired and the Company must perform the second step of the
transitional impairment test. In the second step, the Company must compare the
implied fair value of the reporting unit's goodwill, determined by allocating
the reporting unit's fair value to all of its assets (recognized and
unrecognized) and liabilities in a manner similar to a purchase price allocation
in accordance with SFAS No. 141, to its carrying amount, both of which would be
measured as of the date of adoption. This second step is required to be
completed as soon as possible, but no later than the end of the year of
adoption. Any transitional impairment loss will be recognized as the cumulative
effect of a change in accounting principle in the Company's statement of
earnings.
As of September 30, 2001, the Company's unamortized goodwill amounted to
$250.6 million and unamortized identifiable intangible assets amounted to $88.1
million, all of which will be subject to the transition provisions of SFAS No.
142. Amortization expense related to goodwill was $11.4 million for each of the
years ended September 30, 2001 and 2000. Because of the extensive effort needed
to comply with adopting SFAS No. 141 and 142, it is not practicable to
reasonably estimate the impact of adopting these Statements on the Company's
financial statements at the date of this report, including whether any
transitional impairment losses will be required to be recognized as the
cumulative effect of a change in accounting principle.
In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations, which addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. The standard applies to legal obligations associated
with the retirement of long-lived assets that result from the acquisition,
construction, development and (or) normal use of the asset.
SFAS No. 143 requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred if a
reasonable estimate of fair value can be made. The fair value of the liability
is added to the carrying amount of the associated asset and this additional
carrying amount is depreciated over the life of the asset. The liability is
accreted at the end of each period through charges to operating expense. If the
obligation is settled for other than the carrying amount of the liability, the
Company will recognize a gain or loss on settlement.
The Company is required and plans to adopt the provisions of SFAS No. 143
for the quarter ending December 31, 2002. Management does not expect such
adoption to have a material effect on the Company's financial statements.
In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets, which supersedes both SFAS No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of and the accounting and reporting provisions of APB Opinion No. 30, Reporting
the Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions, for the disposal of a segment of a business (as previously defined
in that Opinion). SFAS No. 144 retains the fundamental provisions in SFAS No.
121 for recognizing and measuring impairment losses on long-lived assets held
for use and long-lived assets to be disposed of by sale, while also resolving
significant implementation issues associated with SFAS No. 121. For example,
SFAS No. 144 provides guidance on how a long-lived asset that is used as part of
a group should be evaluated for impairment, establishes criteria for when a
long-lived asset is held for sale, and prescribes the accounting for a
long-lived asset that will be disposed of other than by sale. SFAS No. 144
retains the basic provisions of Opinion 30 on how to present discontinued
operations in the income statement but broadens that presentation to include a
component of an entity (rather than a segment of a business). Unlike SFAS No.
121, an impairment assessment under SFAS No. 144 will never result in a
write-down of goodwill. Rather, goodwill is evaluated for impairment under SFAS
No. 142.
The Company is required and plans to adopt SFAS No. 144 for the quarter
ending December 31, 2002. Management does not expect such adoption to have a
material impact on the Company's financial statements because the impairment
assessment under Statement 144 is largely unchanged from SFAS No.121.
FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE
This document, and documents that have been incorporated herein by
reference, include various forward-looking statements regarding the Company that
are subject to risks and uncertainties, including, without limitation, the
factors set forth under the caption "Risk Factors." Forward-looking statements
include, but are not limited to, discussions regarding the Company's operating
strategy, growth strategy, acquisition strategy, cost savings initiatives,
industry, economic conditions, financial condition, liquidity and capital
resources, results of operations and impact of new accounting pronouncements.
Such statements include, but are not limited to, statements preceded by,
followed by or that otherwise include the words "believes," "expects,"
"anticipates," "intends," "estimates" or similar expressions. For those
statements, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995.
The following important factors, in addition to those discussed elsewhere
in this document, and the documents which are incorporated herein by reference,
could affect the future financial results of the Company and could cause actual
results to differ materially from those expressed in forward-looking statements
contained or incorporated by reference in this document:
- - ongoing integration of past and future acquisitions, in light of challenges
in retaining key employees, synchronizing business processes and
efficiently integrating facilities, marketing, and operations;
- - successful implementation of the Company's operating and growth strategy,
including possible strategic acquisitions;
- - fluctuations in quarterly operating results caused by a variety of factors
including the timing of property-related gains and losses, preopening
costs, the effect of weather on travel and transportation patterns, player
strikes or other events affecting major league sports and local, national
and international economic conditions;
- - the ability of the Company to form and maintain its strategic relationships
with certain large real estate owners and operators;
- - global and/or regional economic factors
- - compliance with laws and regulations, including, without limitation
environmental, anti-trust and consumer protection laws and regulations at
the federal, state and international levels.
RISK FACTORS
THE FAILURE TO SUCCESSFULLY INTEGRATE PAST AND FUTURE ACQUISITIONS COULD
HAVE A NEGATIVE IMPACT ON CENTRAL PARKING'S BUSINESS AND THE MARKET PRICE OF ITS
COMMON STOCK.
Central Parking completed the merger with Allright Holdings, Inc. in fiscal
1999. In addition, Central Parking completed two acquisitions subsequent to
September 30, 2001, and plans to pursue additional acquisitions in the future.
Central Parking can give no assurance that any acquired facility or company will
be successfully integrated into its operations. Also, because of the price paid
by Central Parking or because of the performance of acquired operations after
such acquisitions, there can be no assurance that the results of the acquired
operations will not be dilutive to Central Parking's per share earnings. Any
acquisition contemplated or completed by Central Parking may result in adverse
short-term effects on Central Parking's reported operating results, divert
management's attention, introduce difficulties in retaining, hiring and training
key personnel, and introduce risks associated with unanticipated problems or
legal liabilities, some or all of which could have a negative effect on Central
Parking's business and financial results.
IF THE COMPANY CANNOT RETURN TO ITS HISTORICAL GROWTH RATE, THE MARKET
PRICE OF ITS STOCK MAY BE ADVERSELY AFFECTED.
As Central Parking has expanded its operations, its ability to maintain its
historical percentage growth rate has become increasingly difficult. The merger
with Allright significantly increased the size of the Company, which is likely
to reduce the impact of future acquisitions on the results of operations of
Central Parking. Central Parking's growth rate also will be directly affected by
the increasingly competitive environment for acquisitions of other operators and
Central Parking's ability to obtain suitable financing for acquisitions. In
addition, the growth rate has been and is expected to be affected by the results
of operations of added parking facilities, which will depend largely upon
Central Parking's ability to integrate acquired operations. There can be no
assurance that Central Parking's failure to retain locations or to return to its
historical percentage growth rate will not negatively affect the market price of
its stock.
IF SIGNIFICANT SHAREHOLDERS OF CENTRAL PARKING SELL A SUBSTANTIAL AMOUNT OF
THEIR STOCK AT THE SAME TIME, THESE SALES COULD HAVE AN ADVERSE IMPACT ON THE
MARKET PRICE OF CENTRAL PARKING COMMON STOCK.
In February 2001, the Company filed a registration statement on Form S-3
covering 7,381,618 shares of the Company's common stock held by certain
shareholders of the Company. These shares were registered pursuant to
registration rights previously granted to these shareholders. These shareholders
may sell all or a portion of the shares that were registered on any stock
exchange, market or trading facility on which the shares are traded, or in
private transactions. If each of these shareholders, or other shareholders who
own significant blocks of Central Parking common stock, sold a substantial
amount of Central Parking common stock, such sales could have a significant
negative impact on the stock's market price.
THE SALE OF A SUBSTANTIAL NUMBER OF SHARES OF CENTRAL PARKING COMMON STOCK
BY MONROE CARELL, CHAIRMAN OF CENTRAL PARKING, THE CARELL CHILDREN'S TRUST AND
VARIOUS OTHER CARELL FAMILY TRUSTS AND FOUNDATIONS UNDER THE ALLRIGHT
REGISTRATION RIGHTS AGREEMENT OR OTHERWISE, COULD NEGATIVELY AFFECT THE MARKET
PRICE OF CENTRAL PARKING COMMON STOCK.
Monroe Carell, Jr., The Carell Children's Trust and various other Carell
family trusts and foundations have certain rights to register shares of Central
Parking common stock under a registration rights agreement entered into in
connection with the Allright merger. The exercise of these rights and the sale
of substantial amounts of stock by Monroe Carell or other family members, could
be perceived negatively by the securities market. As a result, these sales could
adversely affect the market price of Central Parking common stock.
CENTRAL PARKING WILL BE UNABLE TO RAISE MONEY THROUGH COMMON STOCK
OFFERINGS UNTIL IT COMPLETES ITS OBLIGATIONS UNDER THE ALLRIGHT REGISTRATION
RIGHTS AGREEMENT.
The Allright Registration Rights Agreement provides certain limitations and
restrictions upon Central Parking's ability to issue new shares of Central
Parking common stock. Until certain shareholders of Central Parking have
received at least $350 million from the sale of Central Parking common stock in
either registered offerings or otherwise, Central Parking cannot sell any shares
of its common stock on its own behalf, subject to certain exceptions. As a
result, Central Parking may not have access to the capital markets for a
significant period of time. There can be no assurance or guarantee that the
restrictions upon Central Parking's ability to raise funds through common stock
offerings will not have a negative effect on Central Parking.
THE COMPANY'S LARGE NUMBER OF LEASED AND OWNED FACILITIES INCREASES THE
RISK THAT THE COMPANY MAY NOT BE ABLE TO COVER THE FIXED COSTS OF ITS LEASED AND
OWNED FACILITIES.
The Company leased or owned 2,169 facilities as of September 30, 2001.
Although there is more potential for income from leased and owned facilities
than from management contracts, they also carry more risk if there is a downturn
in property performance or commercial real estate occupancy rates because a
significant part of the costs to operate such facilities typically is fixed. For
example, in the case of leases, there are typically minimum lease payments, and
in the case of owned facilities, there are the normal risks of ownership and
costs of capital. In addition, maintenance and operating expenses for both
leased and owned facilities are borne by Central Parking and are not passed
through to the owner, as is the case with management contracts. Generally,
performance of Central Parking's parking facilities depend, in part, on its
ability to negotiate favorable contract terms, its ability to control operating
expenses, financial conditions prevailing generally and in areas where parking
facilities are located, the nature and extent of competitive parking facilities
in the area, weather conditions and the real estate market generally.
WE HAVE FOREIGN OPERATIONS THAT MAY BE ADVERSELY AFFECTED BY FOREIGN
CURRENCY EXCHANGE RATE FLUCTUATIONS.
Central Parking operates in the United Kingdom, Germany, Mexico, the
Republic of Ireland, Chile, Poland, Canada, and Spain, and intends to expand its
business in these and other international locations. For the year ended
September 30, 2001, revenues from foreign operations represented 5.6% of Central
Parking's total revenues. The Company's United Kingdom operations accounted for
61.4% of such revenues, excluding earnings from joint ventures. Central Parking
receives revenues and incurs expenses in various foreign currencies in
connection with its foreign operations and, as a result, Central Parking is
subject to currency exchange rate fluctuations. Central Parking intends to
continue to invest in foreign leased or owned parking facilities, either
independently or through joint ventures, where appropriate, and may become
increasingly exposed to foreign currency fluctuations. Presently, Central
Parking has limited exposure to foreign currency risk and anticipates
implementing a hedging program if such risk materially increases.
IF WE INCREASE OPERATIONS IN EUROPE, THE EURO CONVERSION MAY ADVERSELY
AFFECT OUR BUSINESS.
On January 1, 1999, eleven of the fifteen member countries of the European
Union established fixed conversion rates between their existing sovereign
currencies and a new currency called the "Euro." These countries adopted the
Euro as their common legal currency on that date. The Euro trades on currency
exchanges and is available for non-cash transactions. Until January 1, 2002, the
existing sovereign currencies will remain legal tender in these countries. On
January 1, 2002, the Euro is scheduled to replace the sovereign legal currencies
of these countries. While the vast majority of Central Parking's operations
within the European Union are currently in the United Kingdom, a European Member
which is not scheduled to participate in the Euro conversion, Central Parking
has operations in countries which have adopted the Euro. Central Parking is in
the process of assessing the impact of the Euro conversion on its operations in
the participating countries, including the need to adopt new information
technology, parking related equipment and other systems to accommodate
Euro-denominated transactions, as well as the impact to currency risk and
contractual relationships. Based on management's assessment of the impact of the
Euro conversion, Central Parking does not believe that the Euro conversion will
have a material impact on its operations or financial condition.
IN CONNECTION WITH OWNERSHIP OR OPERATION OF PARKING FACILITIES, WE MAY BE
POTENTIALLY LIABLE FOR ENVIRONMENTAL PROBLEMS.
Under various federal, state, and local environmental laws, ordinances, and
regulations, a current or previous owner or operator of real property may be
liable for the cost of removal or remediation of hazardous or toxic substances
on, under, or in such property. Such laws typically impose liability without
regard to whether the owner or operator knew of, or was responsible for, the
presence of such hazardous or toxic substances. There can be no assurance that a
material environmental claim will not be asserted against Central Parking or
against its owned or operated parking facilities. The cost of defending against
claims of liability, or of remediating a contaminated property, could have a
negative effect on Central Parking's business and financial results.
IF WE CANNOT MAINTAIN POSITIVE RELATIONSHIPS WITH LABOR UNIONS REPRESENTING
OUR EMPLOYEES, A WORK STOPPAGE MAY ADVERSELY AFFECT OUR BUSINESS.
Approximately 5,500 employees of Central Parking are represented by labor
unions. There can be no assurance that Central Parking will be able to renew
existing labor union contracts on acceptable terms. Employees could exercise
their rights under the labor union contract, which could include a strike or
walk-out. In such cases, there are no assurances that Central Parking would be
able to staff sufficient employees for its short-term needs. Any such labor
strike or the inability of Central Parking to negotiate a satisfactory contract
upon expiration of the current agreements could have a negative effect on
Central Parking's business and financial results.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
INTEREST RATES
The Company's primary exposure to market risk consists of changes in
interest rates on variable rate borrowings. As of September 30, 2001, the
Company had $238.0 million of variable rate debt outstanding under the Credit
Facility, priced at LIBOR plus 87.5 basis points. The Company is required under
the Credit Facility to enter into interest rate protection agreements designed
to limit the Company's cash flow exposure to increases in interest rates. As of
September 30, 2001, interest rate protection agreements had been purchased to
hedge $100 million of the Company's variable rate debt. See Note 9 to the
Consolidated Financial Statements for a description of the hedge transactions
entered into by the Company. $125.0 million of the Credit Facility is payable
in quarterly installments of $12.5 million through March 2004. The Company
anticipates paying the scheduled quarterly payments out of operating cash flow
and, if necessary, will attempt to renew the revolving credit facility.
In March 2000, a limited liability company of which the Company is the sole
shareholder, purchased a parking structure for $19.6 million and financed $13.3
million with a five-year note bearing interest at one-month floating LIBOR plus
162.5 basis points. To fix the interest rate, the Company entered into a
five-year LIBOR swap, yielding an effective interest cost of 8.91% for the
five-year period.
FOREIGN CURRENCY EXPOSURE
The Company derived $39.5 million or 5.6% of total revenues from foreign
sources in fiscal 2001. Of the $39.5 million, 61.4% was derived from the United
Kingdom and 28.5% was derived from Canada. The Company does not employ any
foreign currency hedge programs because management does not believe the risk to
be material. See Note 18 of the Consolidated Financial Statements.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CENTRAL PARKING CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE
----
Independent Auditors' Report 28
Consolidated Balance Sheets as of September 30, 2001 and 2000 29
Consolidated Statements of Earnings for the Years Ended
September 30, 2001, 2000 and 1999 30
Consolidated Statements of Changes in Shareholders' Equity and
Comprehensive Income for the Years Ended
September 30, 2001, 2000 and 1999 31
Consolidated Statements of Cash Flows for the Years Ended
September 30, 2001, 2000 and 1999 32
Notes to Consolidated Financial Statements 34
INDEPENDENT AUDITORS' REPORT
THE BOARD OF DIRECTORS
CENTRAL PARKING CORPORATION AND SUBSIDIARIES:
We have audited the accompanying consolidated balance sheets of Central
Parking Corporation and subsidiaries as of September 30, 2001 and 2000, and the
related consolidated statements of earnings, shareholders' equity and
comprehensive income, and cash flows for each of the years in the three-year
period ended September 30, 2001. In connection with our audits of the
consolidated financial statements, we have also audited the financial statement
Schedule II - Valuation and Qualifying Accounts and financial statement Schedule
IV - Mortgage Loans on Real Estate as of September 30, 2001 and for each of the
years in the three-year period ended September 30, 2001. These consolidated
financial statements and financial statement schedules are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedules based on our
audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Central
Parking Corporation and subsidiaries as of September 30, 2001 and 2000, and the
results of their operations and their cash flows for each of the years in the
three-year period ended September 30, 2001, in conformity with accounting
principles generally accepted in the United States of America. Also, in our
opinion, the related financial statement schedules, when considered in relation
to the basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.
KPMG LLP
Nashville, Tennessee
November 26, 2001
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Amounts in thousands, except share data
SEPTEMBER 30,
2001 2000
--------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 41,849 $ 43,214
Management accounts receivable 32,613 32,052
Accounts receivable - other 16,149 14,995
Current portion of notes receivable (including amounts due
from related parties of $4,304 in 2001 and $763 in 2000) 6,836 4,090
Prepaid rent 5,027 8,307
Prepaid other expenses 5,460 4,953
Deferred income taxes 259 612
--------- -----------
Total current assets 108,193 108,223
Investments, at amortized cost (fair value $6,215 in 2001 and $5,775 in 2000) 6,035 5,778
Notes receivable, less current portion 42,931 46,153
Property, equipment, and leasehold improvements, net 415,405 432,833
Contracts and lease rights, net 88,094 96,607
Goodwill, net 250,630 264,756
Investment in and advances to partnerships and joint ventures 30,704 30,306
Other assets 44,889 37,649
--------- -----------
Total Assets $986,881 $1,022,305
========= ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations $ 53,337 $ 55,760
Accounts payable 78,879 73,461
Accrued payroll and related costs 12,616 14,287
Accrued expenses 12,381 12,236
Management accounts payable 20,541 33,452
Income taxes payable 7,134 8,279
--------- -----------
Total current liabilities 184,888 197,475
Long-term debt and capital lease obligations, less current portion 223,135 253,535
Deferred rent 21,228 18,794
Deferred compensation 12,330 11,732
Deferred income taxes 15,757 24,801
Minority interest 31,121 31,108
Other liabilities 6,976 4,603
--------- -----------
Total liabilities 495,435 542,048
Company-obligated mandatorily redeemable convertible securities of
Subsidiary holding solely parent debentures 110,000 110,000
Shareholders' equity:
Common stock, $0.01 par value; 50,000,000 shares authorized,
35,791,550 and 36,330,275 shares issued and outstanding at
September 30, 2001and 2000, respectively 358 363
Additional paid-in capital 238,464 248,817
Accumulated other comprehensive loss, net (1,979) (144)
Retained earnings 145,308 121,612
Shares held in trust (705) --
Deferred compensation on restricted stock -- (391)
--------- -----------
Total shareholders' equity 381,446 370,257
--------- -----------
Total Liabilities and Shareholders' Equity $986,881 $1,022,305
========= ===========
See accompanying notes to consolidated financial statements.
- ------------------------------------------------------------------
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
Amounts in thousands, except per share data
YEAR ENDED SEPTEMBER 30,
2001 2000 1999
--------- --------- ---------
Revenues:
Parking $603,416 $628,666 $639,086
Management contract 101,743 102,263 91,386
--------- --------- ---------
Total revenues 705,159 730,929 730,472
Costs and expenses:
Cost of parking 513,571 528,684 535,168
Cost of management contracts 41,188 36,270 27,740
General and administrative 66,807 71,946 77,312
Goodwill and noncompete amortization 12,041 12,120 11,607
Merger costs -- 3,747 40,970
--------- --------- ---------
Total costs and expenses 633,607 652,767 692,797
Property-related (losses) gains, net (7,255) 935 3,006
--------- --------- ---------
Operating earnings 64,297 79,097 40,681
Other income (expenses):
Interest income 5,807 6,904 6,639
Interest expense (20,568) (27,004) (26,951)
Dividends on company-obligated mandatorily redeemable
convertible securities of a subsidiary trust (5,886) (6,012) (5,926)
Equity in partnership and joint venture earnings 5,075 10,260 5,233
--------- --------- ---------
Earnings before income taxes, minority interest, extraordinary
item and cumulative effect of accounting change 48,725 63,245 19,676
Income tax expense (benefit):
Current 26,462 25,843 15,423
Deferred (7,350) (2,566) (3,043)
--------- --------- ---------
Total income taxes 19,112 23,277 12,380
--------- --------- ---------
Earnings before minority interest, extraordinary item and
cumulative effect of accounting change 29,613 39,968 7,296
Minority interest in earnings of consolidated subsidiaries, net of tax (3,502) (3,334) (2,612)
--------- --------- ---------
Earnings before extraordinary item and
cumulative effect of accounting change 26,111 36,634 4,684
Extraordinary item, net of tax -- (195) (1,002)
Cumulative effect of accounting change, net of tax (258) -- --
--------- --------- ---------
Net earnings $ 25,853 $ 36,439 $ 3,682
========= ========= =========
Basic earnings per share:
Earnings before extraordinary item and
Cumulative effect of accounting change $ 0.73 $ 1.01 $ 0.13
Extraordinary item, net of tax $ -- $ (0.01) $ (0.03)
Cumulative effect of accounting change, net of tax $ (0.01) $ -- $ --
--------- --------- ---------
Net earnings $ 0.72 $ 1.00 $ 0.10
========= ========= =========
Diluted earnings per share:
Earnings before extraordinary item and
Cumulative effect of accounting change $ 0.73 $ 0.99 $ 0.13
Extraordinary item, net of tax $ -- $ -- $ (0.03)
Cumulative effect of accounting change, net of tax $ (0.01) $ -- $ --
--------- --------- ---------
Net earnings $ 0.72 $ 0.99 $ 0.10
========= ========= =========
See accompanying notes to consolidated financial statements.
- ------------------------------------------------------------------
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
Amounts in thousands, except per share data
ACCUMULATED DEFERRED
ADDITIONAL OTHER COMPENSATION
NUMBER OF COMMON PAID-IN COMPREHENSIVE RETAINED AND SHARES
SHARES STOCK CAPITAL LOSS EARNINGS HELD IN TRUST
---------- -------- ------------ --------------- ---------- ---------------
Balance at September 30, 1998 36,522 $ 366 $ 256,405 $ (150) $ 85,795 $ (502)
---------- -------- ------------ --------------- ---------- ---------------
Allright equity adjustment to
conform fiscal years -- -- -- -- (20) --
Issuance under restricted stock
plan and employment agreements 1 -- 74 -- -- --
Issuance under Employee Stock
Ownership Plan 48 -- 1,401 -- -- --
Common stock dividends, $0.06 per share -- -- -- -- (2,093) --
Exercise of stock options and
related tax benefits 183 2 1,973 -- -- --
Amortization of deferred compensation -- -- -- -- -- 56
Comprehensive income:
Net earnings -- -- -- -- 3,682 --
Foreign currency translation adjustment -- -- -- 130 -- --
Total comprehensive income
---------- -------- ------------ --------------- ---------- ---------------
Balance at September 30, 1999 36,754 $ 368 $ 259,853 $ (20) $ 87,364 $ (446)
---------- -------- ------------ --------------- ---------- ---------------
Issuance under restricted stock
plan and employment agreements 3 -- 48 -- -- --
Issuance under Employee Stock
Ownership Plan 72 1 1,231 -- -- --
Common stock dividends, $0.06 per share -- -- -- -- (2,191) --
Exercise of stock options and warrants and
related tax benefits 352 3 2,299 -- -- --
Amortization of deferred compensation -- -- -- -- -- 55
Repurchase of common stock (851) (9) (14,614) -- -- --
Comprehensive income:
Net earnings -- -- -- -- 36,439 --
Foreign currency translation adjustment -- -- -- (124) -- --
Total comprehensive income
---------- -------- ------------ --------------- ---------- ---------------
Balance at September 30, 2000 36,330 $ 363 $ 248,817 $ (144) $ 121,612 $ (391)
---------- -------- ------------ --------------- ---------- ---------------
Issuance under restricted stock
plan and employment agreements 3 -- 48 -- -- --
Issuance under Employee Stock
Ownership Plan 71 1 1,101 -- -- --
Common stock dividends, $0.06 per share -- -- -- -- (2,157) --
Exercise of stock options and
related tax benefits 78 1 1,339 -- -- --
Amortization of deferred compensation -- -- -- -- -- 391
Issuance of stock into Rabbi Trust -- -- -- -- -- (705)
Repurchase of common stock (690) (7) (12,841) -- -- --
Comprehensive income:
Net earnings -- -- -- -- 25,853 --
Foreign currency translation adjustment -- -- -- 176 -- --
Unrealized loss on fair value of derivatives -- -- -- (2,011) -- --
Total comprehensive income
---------- -------- ------------ --------------- ---------- ---------------
Balance at September 30, 2001 35,792 $ 358 $ 238,464 $ (1,979) $ 145,308 $ (705)
========== ======== ============ =============== ========== ===============
TOTAL
---------
Balance at September 30, 1998 $341,914
---------
Allright equity adjustment to
conform fiscal years (20)
Issuance under restricted stock
plan and employment agreements 74
Issuance under Employee Stock
Ownership Plan 1,401
Common stock dividends, $0.06 per share (2,093)
Exercise of stock options and
related tax benefits 1,975
Amortization of deferred compensation 56
Comprehensive income:
Net earnings 3,682
Foreign currency translation adjustment 130
---------
Total comprehensive income 3,812
---------
Balance at September 30, 1999 $347,119
---------
Issuance under restricted stock
plan and employment agreements 48
Issuance under Employee Stock
Ownership Plan 1,232
Common stock dividends, $0.06 per share (2,191)
Exercise of stock options and warrants and
related tax benefits 2,302
Amortization of deferred compensation 55
Repurchase of common stock (14,623)
Comprehensive income:
Net earnings 36,439
Foreign currency translation adjustment (124)
---------
Total comprehensive income 36,315
---------
Balance at September 30, 2000 370,257
---------
Issuance under restricted stock
plan and employment agreements 48
Issuance under Employee Stock
Ownership Plan 1,102
Common stock dividends, $0.06 per share (2,157)
Exercise of stock options and
related tax benefits 1,340
Amortization of deferred compensation 391
Issuance of stock into Rabbi Trust (705)
Repurchase of common stock (12,848)
Comprehensive income:
Net earnings 25,853
Foreign currency translation adjustment 176
Unrealized loss on fair value of derivatives (2,011)
---------
Total comprehensive income 24,018
---------
Balance at September 30, 2001 $381,446
=========
See accompanying notes to consolidated financial statements.
- ------------------------------------------------------------------
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Amounts in thousands
YEAR ENDED SEPTEMBER 30,
2001 2000 1999
--------- --------- ---------
Cash flows from operating activities:
Net earnings $ 25,853 $ 36,439 $ 3,682
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization of property 21,706 23,192 22,872
Amortization of goodwill and non-compete agreements 12,041 12,120 11,607
Amortization of contract and lease rights,
straight-line rent, deferred financing fees and other 13,219 10,923 8,652
Equity in partnership and joint venture earnings (5,075) (10,260) (5,233)
Distributions from partnerships and joint ventures 3,300 10,039 5,149
Net (gains) losses on property related activities 7,255 (935) (3,006)
Deferred income taxes (7,350) (2,566) (3,043)
Minority interest 3,502 3,334 2,612
Charge for Edison minority interest write-up -- -- 7,000
Changes in operating assets and liabilities, excluding effects of acquisitions:
Management accounts receivable (561) 1,236 (13,441)
Accounts receivable - other (1,154) 4,193 (5,432)
Prepaid rent 3,280 5,923 1,708
Prepaid expenses - other (507) 2,485 (1,673)
Prepaid and refundable income taxes -- 5,374 (4,108)
Other assets (10,051) 2,728 (10,864)
Accounts payable, accrued expenses and deferred compensation (4,966) (8,810) 7,653
Management accounts payable (12,911) 36 6,805
Income taxes payable (1,145) 4,958 3,861
--------- --------- ---------
Net cash provided by operating activities 46,436 100,409 34,801
--------- --------- ---------
Cash flows from investing activities:
Proceeds from disposition of property and equipment 30,800 28,881 25,252
(Investments in) repayments of notes receivable, net 476 10,130 (12,377)
Purchase of property, equipment and leasehold improvements (28,639) (52,242) (38,000)
Purchase of contract and lease rights (2,583) (980) (43,338)
Investments in and advances to partnerships, joint ventures and unconsolidated
subsidiaries, net of repayments of capital and principal 1,377 (2,224) (219)
Purchase of remaining interest in unconsolidated subsidiary -- -- (20,789)
Acquisitions of companies, net of cash acquired -- (257) (785)
Proceeds from maturities and calls of investments 1,225 537 712
Purchase of investments (1,482) (827) (1,113)
--------- --------- ---------
Net cash provided (used) by investing activities 1,174 (16,982) (90,657)
--------- --------- ---------
Cash flows from financing activities:
Dividends paid (2,163) (2,197) (1,986)
Net borrowings (repayments) under revolving credit agreement 22,488 (60,914) 98,677
Proceeds from issuance of notes payable, net of issuance costs -- 13,300 263,615
Payment to minority interest partner (3,489) (3,338) (2,103)
Principal repayments on notes payable (55,629) (28,718) (302,413)
Repurchase of common stock (12,848) (14,623) --
Proceeds from issuance of common stock and exercise of stock options 2,490 2,732 2,813
--------- --------- ---------
Net cash (used) provided by financing activities (49,151) (93,758) 58,603
--------- --------- ---------
Foreign currency translation 176 (124) 178
--------- --------- ---------
Net increase (decrease) in cash and cash equivalents (1,365) (10,455) 2,925
Cash and cash equivalents at beginning of year 43,214 53,669 39,495
Cash and cash equivalents derived from Allright merger -- -- 11,249
--------- --------- ---------
Cash and cash equivalents at end of year $ 41,849 $ 43,214 $ 53,669
========= ========= =========
Non-cash transactions:
Issuance of restricted stock $ 48 $ 48 $ 74
Purchase of lease rights and contract rights with notes payable $ 318 $ 14,250 $ --
Unrealized loss on fair value of derivatives $ 2,011 $ -- $ --
Effects of acquisitions:
Estimated fair value of assets acquired $ -- $ 365 $ 285
Purchase price in excess of the net assets acquired (goodwill) -- 355 500
Estimated fair values of liabilities assumed -- (412) --
--------- --------- ---------
Cash paid -- 308 785
Less cash acquired -- (51) --
--------- --------- ---------
Net cash paid for acquisitions $ -- $ 257 $ 785
========= ========= =========
See accompanying notes to consolidated financial statements.
- ------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the preparation
of the accompanying consolidated financial statements follows:
(a) Organization and Basis of Presentation
Central Parking Corporation ("CPC") is a United States company chartered in
the State of Tennessee. The consolidated financial statements include accounts
of Central Parking Corporation and its subsidiaries (the "Company" or "Central
Parking") including Central Parking System, Inc. ("CPS") and its wholly-owned
U.S. subsidiaries; Kinney System Holdings, Inc. and its wholly-owned
subsidiaries ("Kinney"); Central Parking System of the United Kingdom, Ltd. and
its wholly-owned subsidiary ("CPS-UK"); Central Parking System Realty, Inc. and
its wholly-owned subsidiaries ("Realty"); Allright Holdings, Inc. and its
wholly-owned subsidiaries ("Allright"), including Edison Parking Management,
L.P. ("Edison"), a 50% owned partnership under Allright control. The results of
operations of the remaining 50% of Edison are eliminated as a minority interest.
All significant inter-company transactions have been eliminated.
The Company owns, operates and manages parking facilities and provides
parking consulting services throughout the world, but principally in the United
States and United Kingdom. The Company manages and operates owned or leased
parking facilities, manages and operates parking facilities owned or leased by
third parties, and provides financial and other advisory services to clients.
(b) Revenues
Parking revenues include the parking revenues from leased and owned
locations. Management contract revenues represent revenues (both fixed and
performance-based fees) from facilities managed for other parties, and
miscellaneous management fees for accounting, insurance and other ancillary
services such as consulting and transportation management services. Parking
revenues from transient parking are recognized as cash is received. Parking
revenues from monthly parkers, fixed fee management contract revenues and
miscellaneous management fees are recognized on a monthly basis based on the
terms of the underlying contracts. Management contract revenues related to
performance-based arrangements are accrued when the performance measures have
been met.
Management accounts payable reflected on the accompanying consolidated
balance sheets is reflected net of cash. Such cash balances belong to the owners
of the various managed facilities, but they are held by the Company and are used
to pay expenses of the managed facilities and ultimately to settle the balance
due to the owners of the managed facilities.
(c) Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers cash
and cash equivalents to include cash on hand, in banks, and short-term, highly
liquid investments with original maturities of three months or less.
(d) Investments
Investment securities consist of debt obligations of states and political
subdivisions and are classified into one of three categories, as follows: (i)
held-to-maturity debt securities, (ii) trading securities, and (iii) securities
available-for-sale. Classification of a debt security as held-to-maturity is
based on the Company's positive intent and ability to hold such security to
maturity. At September 30, 2001 and 2000, all of the Company's investment
securities were classified as held-to-maturity. Such securities are stated at
amortized cost adjusted for amortization of premiums and accretion of discounts,
unless there is a decline in value which is considered to be other than
temporary, in which case the cost basis of such security is written down to fair
value and the amount of the write-down is reflected in earnings.
(e) Property, Equipment, and Leasehold Improvements
Property, equipment, computer software, computer hardware, and leasehold
improvements are recorded at cost. Depreciation is provided principally on a
straight-line basis over a period of one to fifteen years for furniture,
fixtures, and equipment, over three years for computer software, over five years
for computer hardware, and over thirty to forty years for buildings and garages.
Leasehold improvements are amortized over the remaining lease term or the
estimated useful life of the asset, whichever is shorter. Major additions and
improvements to property and equipment are capitalized. Repair and maintenance
costs are charged to operating expense as they are incurred.
(f) Investment in and Advances to Partnerships and Joint Ventures
The Company has a number of joint ventures to operate and develop parking
garages through either corporate joint ventures, general partnerships, limited
liability companies, or limited partnerships. The financial results of the
Company's joint ventures are generally accounted for under the equity method and
are included in equity in partnership and joint venture earnings in the
accompanying consolidated statements of earnings with the exception of Edison,
which is consolidated into the Company's financial statements, with the
remaining 50% eliminated through minority interest.
(g) Investment in Edison Parking Management, L.P.
On June 1, 1997, Allright acquired a 50% controlling interest in Edison.
Edison's assets include management contracts contributed by the limited partner,
Park Fast Parking Management, L.P. ("Park Fast"), a third party. These
management contracts were recorded at their estimated fair market value and are
being amortized on a straight-line basis over their estimated lives, which
average 12 years.
In conjunction with the Company's merger with Allright, Allright entered
into a restructuring agreement whereby Allright loaned an additional $9.9
million to the limited partner and amended certain other related agreements. In
addition, the parties agreed that the limited partner's capital account would be
increased to $29.4 million as of the effective date of the restructuring, which
coincided with the consummation date of the merger with Allright. As a result of
this increase in the limited partner's capital account, the Company recorded a
$7.0 million charge to operations concurrent with the merger. Such charge is
reflected in merger costs in the accompanying consolidated statement of earnings
for fiscal 1999.
(h) Contract and Lease Rights
Contract and lease rights consist of capitalized payments made to third
parties which provide the Company the opportunity to manage or lease facilities.
Contract and lease rights are allocated among respective locations and are
amortized principally on a straight-line basis over the terms of related
agreements which range from five to thirty years, or an estimated term
considering anticipated terminations and renewals.
(i) Goodwill
Goodwill, which represents the excess of purchase price over fair value of
net assets acquired, is amortized on a straight-line basis over the expected
periods to be benefited, ranging from five to thirty years.
(j) Other Assets
Other assets is comprised of a combination of the cash surrender value of
key man life insurance policies, security deposits, key money deposits with
clients, deferred issuance costs related to the sale of Preferred Securities
discussed in Note 10, deferred debt issuance costs related to the Company's
credit facilities, and non-compete agreements. Key money represents deposits and
prepayments tendered to clients at the inception of long-term relationships, and
is amortized over the life of the applicable lease. Non-compete agreements are
amortized over the life of the agreement, or the economic useful life whichever
is shorter. Deferred issuance costs related to the Preferred Securities are
amortized over the 30-year life of the underlying subordinated debentures.
Deferred debt issuance costs are amortized over the life of the related debt.
(k) Lease Transactions and Related Balances
The Company accounts for operating lease obligations and sublease income on
a straight-line basis. Contingent or percentage payments and receipts are
recognized when operations indicate such amounts will be paid or received. Lease
obligations paid in advance are included in prepaid rent. The difference between
actual lease payments and straight-line lease expenses over the lease term is
included in accrued expense or deferred rent, as appropriate. Rent expense for
all operating leases and rental income from subleases are reflected in cost of
parking, or general and administrative expenses.
In connection with its acquisitions, the Company revalued certain leases to
estimated fair market value at the time of the respective acquisition. Favorable
operating leases of entities acquired represent the present value of the excess
of the current market rental over the contractual lease payments. Unfavorable
operating leases of entities acquired represent the present value of the excess
of the contractual lease payments over the current market rental. Such write-ups
and write-downs are amortized on a straight-line basis over the remaining life
of the underlying lease, or 30 years, whichever is shorter. Favorable and
unfavorable lease rights are reflected on the accompanying consolidated balance
sheets in contract and lease rights and other liabilities, respectively.
(l) Property-Related Gains (Losses), Net
Net property-related gains and losses on the accompanying consolidated
statements of earnings include (i) realized gains and losses on the sale of
owned parking facilities assets, (ii) impairment of long-lived assets, and (iii)
costs incurred to terminate existing parking facility leases prior to their
contractual termination date.
(m) Impairment of Long-Lived Assets
Long-lived assets, including goodwill and certain identifiable intangibles,
are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of the asset may not be recoverable. Recoverability of
assets to be held and used is measured by a comparison of the carrying amount of
an asset to future undiscounted net cash flows expected to be generated by the
asset. If such assets are considered to be impaired, the impairment to be
recognized is the amount by which the carrying amount of the assets exceeds the
fair value of the assets. Assets to be disposed of are reported at the lower of
the carrying amount or the fair value less the costs to sell.
The Company periodically reviews the carrying value of long-lived assets to
determine if the net book values of such assets continue to be recoverable over
the remainder of the original estimated useful life. In performing this review
for recoverability, the Company estimates the future cash flows expected to
result from the use of the asset and its eventual disposition. If the sum of the
expected net future cash flows (undiscounted and without interest charges) is
less than the carrying amount of the asset, an impairment loss is recognized
based on the estimated diminution of value. If the assets involved are to be
held and used in the operations of the Company, consideration is also given to
actions or remediations the Company might take in order to achieve the original
estimates of cash flows.
(n) Income Taxes
The Company files a consolidated federal income tax return. The Company
uses the asset and liability method to account for income taxes. Under this
method, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date. Work opportunity tax credits are
accounted for by the flow-through method, which recognizes the credits as
reductions of income tax expense in the year utilized. The Company does not
provide for federal income taxes on the accumulated earnings considered
permanently reinvested in foreign subsidiaries.
(o) Pre-opening Expense
The direct and incremental costs of hiring and training personnel
associated with the opening of new parking facilities and the associated
internal development costs are expensed as incurred.
(p) Per Share and Share Data
Basic earnings per share excludes dilution and is computed by dividing
income available to common shareholders by the weighted-average number of common
shares outstanding for the period. Diluted earnings per share reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the entity.
(q) Foreign Currency Translation
The financial position and results of operations of the Company's foreign
subsidiaries and equity method joint ventures are measured using local currency
as the functional currency. Translation adjustments arising from the differences
in exchange rates from period to period are generally included in the currency
translation adjustment in shareholders' equity.
(r) Fair Value of Financial Instruments
The Company discloses the fair values of on- and off-balance sheet
financial instruments for which it is practicable to estimate the value. Fair
value disclosures exclude certain financial instruments such as trade
receivables and payables when carrying values approximate the fair value. Fair
value disclosures are not required for employee benefit obligations, lease
contracts, and all non-financial instruments such as land, buildings and
equipment. The fair values of the financial instruments are estimates based upon
current market conditions and quoted market prices for the same or similar
instruments as of September 30, 2001. Book value approximates fair value for
substantially all of the Company's assets, liabilities and off-balance sheet
derivatives that fall under the fair value disclosure requirements.
(s) Stock Option Plan
The Company applies the intrinsic value based method of accounting
prescribed by Accounting Principles Board opinion No. 25 ("APB No. 25"),
"Accounting for Stock Issued to Employees," and related interpretations in
accounting for its stock options. As such, compensation expense would be
recorded on the date of grant only if the current market price of the underlying
stock exceeded the exercise price.
(t) Business Concentrations
Approximately 41% of the Company's total revenues for fiscal year 2001 were
attributable to parking and management contract operations geographically
located in the Northeastern area of the United States. See also Note 18.
As of September 30, 2001, approximately 29% of the Company's employees are
subject to various collective bargaining agreements as members of unions.
(u) Risk Management
The Company utilizes a combination of indemnity and self-insurance
coverages up to certain maximum losses for liability, health and workers'
compensation claims. The accompanying consolidated balance sheets reflect the
estimated losses related to such risks. These policies have deductibles of up to
$250,000 per occurrence which must be met before the insurance companies are
required to reimburse the Company for costs and liabilities related to covered
claims. As a result, the Company is, in effect, self-insured for all claims up
to the deductible levels.
(v) Use of Estimates
Management of the Company has made certain estimates and assumptions
relating to the reporting of assets and liabilities to prepare these
consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America. Actual results could differ
from these estimates.
(w) Derivative financial instruments
The Company uses variable-rate debt to finance its operations. These debt
obligations expose the Company to variability in interest payments due to
changes in interest rates. If interest rates increase, interest expense
increases. Conversely, if interest rates decrease, interest expense also
decreases. Management believes it is prudent to limit the variability of its
interest payments.
To meet this objective, management enters into various types of derivative
instruments to manage fluctuations in cash flows resulting from interest rate
risk. These instruments include interest rate swaps and caps. Under the interest
rate swaps, the Company receives variable interest rate payments and makes fixed
interest rate payments, thereby creating fixed-rate debt. The purchased interest
rate cap agreements also protect the Company from increases in interest rates
that would result in increased cash interest payments made under its Credit
Facility. Under the agreements, the Company has the right to receive cash if
interest rates increase above a specified level.
The Company does not enter into derivative instruments for any purpose
other than cash flow hedging purposes. That is, the Company does not speculate
using derivative instruments. The Company assesses interest rate cash flow risk
by continually identifying and monitoring changes in interest rate exposures
that may adversely impact expected future cash flows and by evaluating hedging
opportunities. The Company maintains risk management control systems to
monitor interest rate cash flow risk attributable to both the Company's
outstanding or forecasted debt obligations as well as the Company's offsetting
hedge positions. The risk management control systems involve the use of
analytical techniques, including cash flow sensitivity analysis, to estimate the
expected impact of changes in interest rates on the Company's future cash flows.
In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS
No. 133 established reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts. Under SFAS No. 133,
the Company recognizes all derivatives as either assets or liabilities, measured
at fair value, in the statement of financial position. In June 2000, SFAS No.
138 "Accounting for Certain Derivative Instruments and Certain Hedging
Activities, an Amendment of FASB Statement No. 133" was issued clarifying the
accounting for derivatives under the new standard.
On October 1, 2000, the Company prospectively adopted the provisions of
SFAS No. 133 and SFAS No. 138, which resulted in the recording of a net
transition loss of $380 thousand, net of related income taxes of $253 thousand,
in accumulated other comprehensive loss. Further, the adoption of SFAS No. 133
and SFAS No. 138 resulted in the Company reducing derivative instrument assets
by $280 thousand and recording $353 thousand of derivative instrument
liabilities.
At September 30, 2001, the Company's derivative financial instruments
consist of three interest rate cap agreements with a combined notional amount of
$75 million and two interest rate swaps with a combined notional amount of $38
million that effectively convert an equal portion of its debt from a floating
rate to a fixed rate. The derivative financial instruments are reported at
their fair values. These instruments comprised derivative instrument assets of
$63 thousand and derivative instrument liabilities of $3.0 million, which are
included as other assets and other liabilities, respectively, on the face of the
balance sheet. During the year ended September 30, 2001, the Company recognized
an additional unrealized loss of $1.7 million, net of related income tax benefit
of $1.2 million in accumulated other comprehensive loss. Additionally, the
Company decreased derivative instruments assets by $267 thousand and increased
derivative instrument liabilities by $2.6 million for the year ended September
30, 2001.
(x) Recent Accounting Pronouncements
Revenue recognition
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB
101). The Company adopted SAB 101 during the quarter ended March 31, 2001 as a
change in accounting principle retroactive to October 1, 2000. Adoption of SAB
101 required the Company to change the timing of recognition of
performance-based revenues on certain management contracts. The cumulative
effect of this accounting change was a loss of $429 thousand ($258 thousand, net
of tax) as of October 1, 2000. Adoption of SAB 101 resulted in an increase in
management contract revenues of $47 thousand for the year ended September 30,
2001
Business combinations, goodwill, intangible and long-lived assets
In July 2001, the FASB issued SFAS No. 141, Business Combinations, and SFAS
No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. SFAS No. 141 also specifies criteria which intangible
assets acquired in a purchase method business combination must meet to be
recognized and reported apart from goodwill. SFAS No. 142 requires that goodwill
and intangible assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually in accordance with the
provisions of SFAS No. 142. SFAS No. 142 also requires that intangible assets
with definite useful lives be amortized over their respective estimated useful
lives to their estimated residual values, and reviewed for impairment in
accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of.
The Company was required to adopt the provisions of SFAS No. 141
immediately. SFAS No. 142 must be adopted by October 1, 2002, but may be
adopted as of October 1, 2001. The Company intends to elect this early
adoption. SFAS No. 142 requires that the Company evaluate its existing
intangible assets and goodwill that were acquired in a prior purchase business
combination, and to make any necessary reclassifications in order to conform
with the new criteria in SFAS No. 141 for recognition apart from goodwill. Upon
adoption of SFAS No. 142, the Company will be required to reassess the useful
lives and residual values of all intangible assets acquired in purchase business
combinations, and make any necessary amortization period adjustments by the end
of the first interim period after adoption. In addition, to the extent an
intangible asset is identified as having an indefinite useful life, the Company
will be required to test the intangible asset for impairment in accordance with
the provisions of SFAS No. 142 within the first interim period. Any impairment
loss will be measured as of the date of adoption and recognized as the
cumulative effect of a change in accounting principle in the first interim
period.
In connection with the transitional goodwill impairment evaluation, SFAS
No. 142 will require the Company to perform an assessment of whether there is an
indication that goodwill is impaired as of the date of adoption. To accomplish
this the Company must identify its reporting units and determine the carrying
value of each reporting unit by assigning the assets and liabilities, including
the existing goodwill and intangible assets, to those reporting units as of the
date of adoption. The Company will then have up to six months from the date of
adoption to determine the fair value of each reporting unit and compare it to
the reporting unit's carrying amount. To the extent a reporting unit's carrying
amount exceeds its fair value, an indication exists that the reporting unit's
goodwill may be impaired and the Company must perform the second step of the
transitional impairment test. In the second step, the Company must compare the
implied fair value of the reporting unit's goodwill, determined by allocating
the reporting unit's fair value to all of its assets (recognized and
unrecognized) and liabilities in a manner similar to a purchase price allocation
in accordance with SFAS No. 141, to its carrying amount, both of which would be
measured as of the date of adoption. This second step is required to be
completed as soon as possible, but no later than the end of the year of
adoption. Any transitional impairment loss will be recognized as the cumulative
effect of a change in accounting principle in the Company's statement of
earnings.
As of September 30, 2001, the Company's unamortized goodwill amounted to
$250.6 million and unamortized identifiable intangible assets amounted to $88.1
million, all of which will be subject to the transition provisions of SFAS No.
142. Amortization expense related to goodwill was $11.4 million for each of the
years ended September 30, 2001 and 2000. Because of the extensive effort needed
to comply with adopting SFAS No. 141 and 142, it is not practicable to
reasonably estimate the impact of adopting these Statements on the Company's
financial statements at the date of this report, including whether any
transitional impairment losses will be required to be recognized as the
cumulative effect of a change in accounting principle.
In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations, which addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. The standard applies to legal obligations associated
with the retirement of long-lived assets that result from the acquisition,
construction, development and (or) normal use of the asset.
SFAS No. 143 requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred if a
reasonable estimate of fair value can be made. The fair value of the liability
is added to the carrying amount of the associated asset and this additional
carrying amount is depreciated over the life of the asset. The liability is
accreted at the end of each period through charges to operating expense. If the
obligation is settled for other than the carrying amount of the liability, the
Company will recognize a gain or loss on settlement.
The Company is required and plans to adopt the provisions of SFAS No. 143
for the quarter ending December 31, 2002. Management does not expect such
adoption to have a material effect on the Company's financial statements.
In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets, which supersedes both SFAS No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of and the accounting and reporting provisions of APB Opinion No. 30, Reporting
the Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions, for the disposal of a segment of a business (as previously defined
in that Opinion). SFAS No. 144 retains the fundamental provisions in SFAS No.
121 for recognizing and measuring impairment losses on long-lived assets held
for use and long-lived assets to be disposed of by sale, while also resolving
significant implementation issues associated with SFAS No. 121. For example,
SFAS No. 144 provides guidance on how a long-lived asset that is used as part of
a group should be evaluated for impairment, establishes criteria for when a
long-lived asset is held for sale, and prescribes the accounting for a
long-lived asset that will be disposed of other than by sale. SFAS No. 144
retains the basic provisions of Opinion 30 on how to present discontinued
operations in the income statement but broadens that presentation to include a
component of an entity (rather than a segment of a business). Unlike SFAS No.
121, an impairment assessment under SFAS No. 144 will never result in a
write-down of goodwill. Rather, goodwill is evaluated for impairment under SFAS
No. 142.
The Company is required and plans to adopt SFAS No. 144 for the quarter
ending December 31, 2002. Management does not expect such adoption to have a
material impact on the Company's financial statements because the impairment
assessment under SFAS No. 144 is largely unchanged from SFAS No.121.
(y) Reclassifications
Certain prior year amounts have been reclassified to conform to the current
year presentation. Certain reclassifications have been made to Allright's
historical financial statements to conform to the Company's presentation.
(2) BUSINESS COMBINATIONS
Allright Merger
On March 19, 1999, Central Parking completed a merger with Allright,
pursuant to which approximately 7.0 million shares of Central Parking common
stock and approximately 0.5 million options and warrants to purchase common
stock of Central Parking, were exchanged for all of the outstanding shares of
common stock and options and warrants to purchase common stock of Allright. The
transaction has been accounted for as a pooling-of-interests. Accordingly,
Central Parking's consolidated financial statements have been restated to
reflect the combined results of operations, financial position and cash flows of
Central Parking and Allright as if Allright for all periods presented.
The Company incurred merger costs of approximately $3.7 million and $41.0
million in fiscal 2000 and 1999, respectively, in connection with the merger
with Allright. These costs, which are directly attributable to the merger and
incremental to the combining companies, were recognized when incurred and are
reflected in the accompanying statement of earnings as merger costs. Included in
these costs are approximately $22.0 million for professional fees; comprised of
investment banking, legal, accounting, and consulting fees; $12.4 million
related to employment agreements and severance contracts; $7.0 million related
to the restructuring agreement with the limited partner of Edison (See Note
1(g)); and the balance of $3.3 million in travel, supplies, printing, and other
out of pocket costs. In connection with the merger, Allright entered into
certain employment and management continuity agreements with certain employees.
See Note 14.
Purchase Acquisitions
Allied Parking
On October 1, 1998, Allright purchased from Allied Parking, Inc. ("Allied")
four leases relating to parking facilities in New York City, with maturities
ranging from 2006 to 2029 for approximately $14.2 million. Allied agreed to
lease to Allright two more lots for 19 years, each in exchange for a note
receivable of $4.9 million, secured by an assignment of rents. Allright also
purchased the right to use the "Allied Parking" name associated with these
leases for $835 thousand. On November 8, 1998, Allright purchased six additional
leases from Allied Parking with maturities ranging from 1999 to 2008 for $5.1
million. Allright also purchased the right to use the "Allied Parking" name
associated with these leases for $300 thousand. During April 1999, the Company
purchased an additional lease from Allied Parking which matures in 2020 for $3.0
million, and also purchased the right to use the "Allied Parking" name
associated with it as part of the purchase price.
12 West 48th Street, LLC
On May 28, 1999 the Company purchased the remaining 60% interest in a
limited liability company for $20.5 million in cash. The Company previously
owned 40% of the partnership. The LLC operates a parking facility in New York
City. The previous partner will continue to manage the garage through June 2006.
Arizona Stadium Parking Garage, LLC
In October 1999, the Company purchased the remaining 50% interest in
Arizona Stadium Parking Garage LLC, a limited liability company that manages the
parking activities for the Arizona stadium, for approximately $1.5 million in
cash. The Company previously owned 50% of the LLC. In accordance with the
partnership agreement, the Company was required to repay the outstanding note
payable and incurred approximately $195 thousand of expenses, net of tax,
related to early extinguishments of debt. This expense has been accounted for
as an extraordinary loss in fiscal 2000.
Black Angus Garage
On March 15, 2000, a LLC of which the Company is the sole shareholder
purchased the Black Angus Garage, a multi-level structure with 300 parking
stalls, located in New York City for $19.6 million in cash. $13.3 million of
the purchase was financed with a five-year note. The remainder was financed
from borrowings under the Credit Facility.
Contract and Lease Rights
The Company entered into an agreement effective June 1, 2000 to acquire
certain lease and contract rights for approximately $14.3 million. The
transaction was financed by the seller (see Note 9). The lease rights are being
amortized over 17 years, the remaining term of the lease, and the contract
rights are being amortized over 3.5 years.
Pro forma results for fiscal 2000 and 1999 are not presented as the impact of
acquisitions to reported results are not significant.
(3) NOTES RECEIVABLE
In connection with the acquisition of Kinney System Holding
Corporation ("Kinney") in February 1998, the Company acquired a note receivable
from the City of New York (the "City") related to two parking garages which were
built on behalf of the City. The Company also has a long-term management
agreement to operate the parking garages. Amounts advanced for the construction
of the garages were recorded as a note receivable and are being repaid by the
City in monthly installments of $156 thousand including interest at 8.0% through
December 2007. In connection with the purchase, the note receivable was recorded
at estimated fair value. At September 30, 2001, the book value of the note
receivable was $9.6 million.
In June 1997, Allright loaned the limited partner of Edison $16.5 million
in connection with Allright's acquisition of its general partnership interest in
Edison. In conjunction with the merger of Allright and Central Parking, the
partnership agreement was restructured and an additional $9.9 million was
advanced to the limited partner. The amended note receivable totals $26.4
million and bears interest at 10%. The note matures June 1, 2006 and is secured
by a pledge of, and security interest in, the limited partner's partnership
interest in Edison.
In connection with the Allright merger, the Company acquired a mortgage
note of $2.5 million, bearing interest at 7.7%, from a partnership which is
secured by a parking garage and rental assignments. The loan is a balloon note
which matures in August 2010.
In connection with the acquisition of Allied, the Company obtained notes
receivables totaling $4.9 million, secured by an assignment of rents from the
properties being leased. The notes are payable monthly and bear interest at the
rate of 7.0%.
The remainder of the notes receivable consist of notes ranging from $3
thousand to $3.1 million at the end of fiscal 2001, and notes ranging from $10
thousand to $1.1 million at the end of fiscal 2000. The notes bear interest at
rates ranging from 8.0% to 12.0% at the end of fiscal 2001.
(4) INVESTMENTS
The amortized cost, gross unrealized gains, gross unrealized losses, and
approximate fair values for such securities are presented as follows (in
thousands):
SEPTEMBER 30,
2001 2000
------- -------
Amortized cost $6,035 $5,778
Unrealized gains 196 96
Unrealized losses (16) (99)
------- -------
Fair value $6,215 $5,775
======= =======
The amortized cost and approximate fair value of debt securities at
September 30, 2001 by maturity are shown below (in thousands):
AMORTIZED FAIR
COST VALUE
--------- --------
Due in one year or less $ 373 $ 380
Due after one year through five years 1,696 1,733
Due after five years through ten years 1,967 2,043
Due after ten years 1,999 2,059
-------- --------
Total securities $ 6,035 $ 6,215
======== ========
(5) PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
A summary of property, equipment and leasehold improvements and related
accumulated depreciation and amortization is as follows (in thousands):
SEPTEMBER 30,
2001 2000
-------- --------
Leasehold improvements $ 43,775 $ 41,328
Buildings and garages 72,814 73,296
Operating equipment 63,401 59,470
Furniture and fixtures 5,250 5,603
Capital leases 3,140 4,359
Aircraft 4,250 4,250
-------- --------
192,630 188,306
Less accumulated depreciation and amortization 66,047 63,817
-------- --------
126,583 124,489
Land 288,822 308,344
-------- --------
Property, equipment and leasehold improvements, net $415,405 $432,833
======== ========
(6) INTANGIBLE AND OTHER ASSETS
Contract and lease rights consist of (in thousands):
SEPTEMBER 30,
2001 2000
-------- --------
Contract and lease rights $118,687 $121,047
Less accumulated amortization 30,593 24,440
-------- --------
Contract and lease rights, net $ 88,094 $ 96,607
======== ========
Goodwill consists of (in thousands):
SEPTEMBER 30,
2001 2000
-------- --------
Excess of purchase price over net assets acquired $293,943 $297,252
Less accumulated amortization 43,313 32,496
-------- --------
Goodwill, net $250,630 $264,756
======== ========
Amortization of goodwill amounted to $11.4 million, $11.4 million and $11.1
million for the years ended September 30, 2001, 2000 and 1999, respectively.
Included in other assets are unamortized balances related to
non-competition agreements of $0.5 million at September 30, 2001 and $1.3
million at September 30, 2000.
(7) PROPERTY-RELATED GAINS (LOSSES), NET
The Company routinely disposes of owned properties due to various factors,
including economic considerations, unsolicited offers from third parties and
condemnation proceedings initiated by local government authorities. Leased
properties are also periodically evaluated and determinations may be made to
sell or exit a lease obligation. Additionally, during the years ended September
30, 2000 and 1999, the Company divested certain owned and leased parking
facilities pursuant to a settlement agreement with the Antitrust Division of the
United States Department of Justice (the "DOJ") in connection with the merger
with Allright.
A summary of property-related gains and losses for the years ended September 30,
2001, 2000 and 1999 is as follows (in thousands):
YEARS ENDED SEPTEMBER 30,
-------------------------
2001 2000 1999
-------- -------- --------
Net gains on sale of property $ 8,816 $ 6,129 $ 4,222
Impairment charges for property, equipment and leasehold improvements (2,817) (729) (1,216)
Impairment charges for goodwill, contract rights and lease rights (5,517) (4,080) --
Lease termination costs (7,737) (385) --
-------- -------- --------
Total property related gains (losses), net $(7,255) $ 935 $ 3,006
======== ======== ========
Included in net gains on sale of property for fiscal 2001 is a $250
thousand loss for environmental liability costs related to a property previously
owned by the Company. The Company recorded impairment charges of $8.3 million in
fiscal 2001, including $5.5 million attributable to properties where the
carrying value of goodwill, contract rights and lease rights was no longer
supportable by projected future cash flows, and $2.8 million related to
equipment and leasehold improvements. Of these impairment charges, $3.4 million
related to properties in New York, $2.8 million in San Francisco, $0.7 million
in New Jersey and the remaining $1.4 million in various other locations. The
Company also incurred $7.7 million of costs to exit unfavorable lease
agreements.
Impairment charges recognized in fiscal 2000 include $3.3 million
attributable to assets subsequently disposed of during the year. These
impairment charges were derived using estimates of net realizable values. The
remaining $1.5 million impairment charge was attributable to assets held for
use, and was based on estimated fair value using estimated cash flows of the
applicable parking facility discounted at the Company's average cost of funds.
In fiscal 1999, the Company recognized an impairment charge of
approximately $1.2 million related to a parking facility the Company was in the
process of selling. The transaction closed in early fiscal 2000.
(8) INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS AND JOINT VENTURES
The following tables reflect the financial position and results of
operations for the partnerships and joint ventures as of September 30, 2001 and
2000, and for each of the years in the three-year period ended September 30,
2001 (in thousands). Aggregate fair value of investments is not disclosed as
quoted market prices are not available.
INVESTMENT ADVANCES
(ACCUMULATED LOSSES) TO PARTNERSHIPS
IN PARTNERSHIPS AND AND JOINT
JOINT VENTURES VENTURES
2001 2000 2001 2000
-------- -------- ------ ------
Civic Parking, LLC $15,194 $14,997 $ -- $ --
Commerce Street Joint Venture (1,041) (944) 607 668
Larimer Square Parking Associates 986 1,030 1,576 1,781
Lodo Parking Garage, LLC 1,102 1,164 -- --
CPS Mexico, Inc. 3,869 2,608 2,701 4,402
Other 3,610 2,999 2,100 1,601
-------- -------- ------ ------
$23,720 $21,854 $6,984 $8,452
======== ======== ====== ======
EQUITY IN PARTNERSHIP AND JOINT VENTURE
JOINT VENTURE EARNINGS DEBT
2001 2000 1999 2001 2000
------ ------- ------ ------- -------
Civic Parking, LLC $1,893 $ 2,068 $1,844 $57,623 $58,370
Commerce Street Joint Venture 455 658 584 6,440 6,759
Larimer Square Parking Associates 248 239 164 2,648 3,027
12 West 48th Street, LLC -- -- 510 -- --
Lodo Parking Garage, LLC 201 269 203 -- --
CPS Mexico, Inc. 1,261 991 638 -- --
Capital Commons 170 5,417 425 -- --
Other 847 618 865 -- --
------ ------- ------ ------- -------
$5,075 $10,260 $5,233 $66,711 $68,156
====== ======= ====== ======= =======
(a) Civic Parking, LLC
The Company has a 50% joint venture ownership in Civic Parking LLC
("Civic") which owns four parking garages and retail space in St. Louis,
Missouri. The Company's results of operations include 50% of the net earnings of
Civic for the periods presented.
Unaudited summary information for Civic Parking is as follows (in thousands):
SEPTEMBER 30,
2001 2000
--------- ---------
Financial position:
Land, property and equipment, net $ 86,626 $ 87,709
Cash 1,233 1,132
Other assets 1,436 653
Liabilities (58,907) (59,499)
--------- ---------
Net assets $ 30,388 $ 29,995
========= =========
YEAR ENDED SEPTEMBER 30,
2001 2000
------- -------
Results of operations:
Revenue $10,732 $10,889
Cost of operations 6,947 6,603
------- -------
Net earnings $ 3,785 $ 4,286
======= =======
Distributions to Central Parking $ 1,613 $ 1,900
======= =======
(b) Commerce Street Joint Venture
The Company has a 50% interest in a joint venture that owns a parking
complex in Nashville, Tennessee. The complex consists of the original parking
garage and retail space (the "Original Facility") and an addition to the parking
garage (the "Addition") constructed several years after the completion of the
Original Facility.
The joint venture financed the Original Facility with industrial
development bonds in the original principal amount of $8.6 million (the "Series
A Bonds") issued by The Industrial Development Board of the Metropolitan
Government of Nashville and Davidson County (the "Metro IDB"). The Metro IDB
holds title to the Original Facility, which it leases to the joint venture under
a lease expiring in 2016. The lease of the Original Facility obligates the
venture to make lease payments corresponding to principal and interest payable
on Series A Bonds and provides the venture with an option to purchase the
Original Facility at any time by paying the amount due under the Series A Bonds
and making a nominal purchase payment to the Metro IDB.
Also included in investments in and advances to partnerships and joint
ventures are the Series B Bonds purchased in April 1994 relating to the Commerce
Street Joint Venture in the amounts of $607 thousand and $668 thousand at
September 30, 2001 and 2000, respectively. The Bonds require monthly interest
and principal payments at the index rate (prime) plus 250 basis points (8.5% at
September 30, 2001) through 2009. The minimum interest rate is 7.5% and the
maximum interest rate is 12%. The Bonds are secured by a mortgage on the project
which is subordinate to the industrial development bonds. The remainder of the
Series B Bonds are owned by the other joint venture partner.
(c) Larimer Square Parking Associates
The Company owns a 50% interest in a joint venture that owns a parking
complex in Denver, Colorado. The complex, which was completed in February 1996,
was constructed and financed by the joint venture partners. The Company invested
$991 thousand in the joint venture and loaned the joint venture $1.1 million in
the form of a construction note, bearing interest at 9.5%, which was converted
to a term note in August 1996, following completion of the project. An
additional $1.4 million was loaned by the Company which will be repaid through
sales tax and property tax revenues by the Denver Urban Renewal Authority at an
interest rate of 10%. The Company manages the parking facility for the venture.
(d) 12 West 48th Street, LLC
In connection with the Kinney acquisition, the Company acquired a 40%
interest in a limited liability company which owns and operates a garage and two
adjacent buildings in New York City. During 1999, the Company purchased the
remaining 60% interest in the limited liability company for $20.5 million in
cash. The previous partner will continue to manage the garage through June 2006.
(e) Lodo Parking Garage, LLC
In March 1995, the Company acquired a 50% interest in a joint venture which
owns a parking complex in Denver, Colorado. The Company invested $1.4 million in
the joint venture and manages the parking facility for the joint venture.
(f) CPS Mexico, Inc.
The Company holds a 50% interest in a Mexican joint venture which manages
and leases various parking structures in Mexico. The Company also has advanced
$2.7 million and $4.4 million at September 30, 2001 and 2000, respectively, to
the affiliate. These loans bear interest between 10% and 12% and require
principal payments over various terms through 2008.
(g) Capital Commons
The Company held a 50% limited partnership interest in this partnership. In
fiscal 2000, the Company recorded to equity in partnership and joint venture
earnings a $5 million gain due to the sale of a property by Capital Commons. The
partnership was terminated subsequent to this transaction. In fiscal 2001, $170
thousand, which was previously escrowed to cover certain legal fees incurred as
part of the property sale, was returned to the Company, resulting in the
recognition of an additional gain for that amount.
(9) LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS
Long-term debt and capital lease obligations consisted of the following (in
thousands):
SEPTEMBER 30,
2001 2000
--------- ---------
Credit Facility
Term note payable $125,000 $175,000
Revolving credit facility 113,000 90,400
Other notes payable 31,109 33,472
Capital lease obligations 7,363 10,423
--------- ---------
Total 276,472 309,295
Less: current maturities of long-term obligations (53,337) (55,760)
--------- ---------
Total long-term obligations $223,135 $253,535
========= =========
On March 19, 1999, the Company established a new credit facility (the
"Credit Facility") providing for an aggregate availability of up to $400 million
consisting of a five-year $200 million revolving credit facility including a
sub-limit of $25 million for standby letters of credit, and a $200 million
five-year term loan. The Credit Facility bears interest at LIBOR plus a grid
based margin dependent upon Central Parking achieving certain financial ratios.
The amount outstanding under the Company's Credit Facility as of September 30,
2001 was $238.0 million with a weighted average interest rate of 4.1%, including
the principal amount of the term loan of $125.0 million which is being repaid in
quarterly payments of $12.5 million through March 2004. The Credit Facility
contains covenants including those that require the Company to maintain certain
financial ratios, restrict further indebtedness and limit the amount of
dividends paid. The aggregate availability under the Credit Facility was $59.6
million at September 30, 2001, which is net of $27.4 million of stand-by letters
of credit.
The Credit Facility contains covenants including those that require the
Company to maintain certain financial ratios, restrict further indebtedness and
limit the amount of dividends paid. On December 28, 1999 the Company entered
into an amendment and waiver to the Credit Facility agreement relating to the
waiver of non-compliance with certain loan covenants at September 30, 1999. This
amendment and waiver contained, among other things, amendment fees of $700
thousand, which are being amortized over the life of the Credit Facility. The
grid-based interest rate margin was not affected by the amendment and continues
to be based upon the Company achieving certain revised financial ratios. As of
September 30, 2001, the Company was in compliance with all covenants or had
obtained applicable waivers.
On February 14, 2000, the Company entered into an amendment and restatement
to the Credit Facility agreement primarily to allow the Company to repurchase up
to $50 million in outstanding shares of its common stock. This amendment and
restatement required the Company to pay an amendment fee of $681 thousand, which
is being amortized over the life of the Credit Facility. Interest rates were not
affected by this amendment.
The Company is required to continue maintaining the aforementioned
financial covenants under the Credit Facility as of the end of each fiscal
quarter. Due to a decline in revenues resulting primarily from the recession and
the September 11 tragedy, the Company may not be in compliance with one or more
of these covenants as of the end of the first or second quarters of fiscal 2002.
As a result, the Company has begun discussions with its lender group regarding
potential amendments to its Credit Facility. These amendments would, among other
things, waive or amend the financial covenants and would likely increase the
Company's cost of funds under its Credit Facility by approximately 100 to 175
basis points. In addition, the Company is evaluating several financing
alternatives, including sale/leaseback opportunities, mortgage financing and
repurchase of a portion of its convertible preferred stock.
The Company is required under the Credit Facility to enter into certain
interest rate protection agreements designed to fix interest rates on variable
rate debt and reduce the Company's cash flow exposure to fluctuations in
interest rates. On October 27, 1999, the Company entered into a $25 million
interest rate swap for a term of four years, cancelable after two years at the
option of the counterparty, under which the Company pays to the counterparty a
fixed rate of 6.16%, and the counterparty pays to the Company a variable rate
equal to LIBOR. The transaction involved an exchange of fixed rate payments for
variable rate payments and does not involve the exchange of the underlying
nominal value. On March 31, 2000, June 29, 2000, and again on September 29,
2000, the Company entered into $25 million interest rate cap agreements. The
rate is 8.0% for the first two cap agreements and 8.5% for the last cap
agreement and each has a term consistent with that of the Credit Facility. The
Company paid a total of $646 thousand for the three $25 million cap agreements.
The cost of the instruments is being amortized over the terms of the agreements.
On March 15, 2000, a limited liability company ("LLC") of which the Company
is the sole shareholder purchased the Black Angus Garage, a multi-level
structure with 300 parking stalls, located in New York City, for $19.6 million.
$13.3 million of the purchase was financed through a five-year note bearing
interest at one month floating LIBOR plus 162.5 basis points. The note is
collateralized by the parking facility. The $12.7 million principal balance
remaining at the end of the five-year loan term will be due in full. To hedge
the Company's cash flow exposure to interest rate fluctuations, the Company
entered into a five-year LIBOR swap, yielding an effective interest cost of
8.91% and an effective monthly principal and interest payment of approximately
$108 thousand for the five-year period. The Company guaranteed $1 million of the
debt, which otherwise would have no recourse except to the LLC. The remainder of
the purchase price was financed from borrowings from the Credit Facility.
On May 12, 2000, the Company entered into an agreement effective June 1,
2000, to acquire certain contract and lease rights for approximately $14.3
million. The transaction was financed by the seller at an interest rate of 7.32%
and is backed by a letter of credit in the amount of $15 million. Interest is
payable monthly. The seller has the option to call the note after May 1, 2003.
If the seller does not exercise such option by November 30, 2003, the Company
has the option, from May 1 2004 to November 30, 2004, to repay the outstanding
principal balance.
The Company also has several notes payable outstanding totaling $3.7
million at September 30, 2001. These notes are secured by real estate and
equipment and bear interest at rates ranging from 6.5% to 10.0%.
In October 1996, Allright entered into a credit agreement for the purpose
of financing the purchase of Allright Corporation ("CFSB Loan"). Additionally,
in October 1996, Allright defeased all of its Industrial Development Revenue
Bonds (IRBs) in the amount of $17.9 million and recorded an extraordinary loss
of $1.0 million, net of tax. At September 30, 2001, approximately $10.0 million
of the IRB's remain outstanding in a trust secured by U.S. Treasury Bills which
were used to defease these instruments. The CFSB Loan was repaid upon
consummation of the merger of Allright and the Company from proceeds of the
Credit Facility. The Company recognized an extraordinary loss of $1.0 million,
net of tax in fiscal 1999 in connection with the repayment of such amounts.
Future maturities under long-term debt arrangements are as follows (in
thousands):
YEAR ENDING
SEPTEMBER 30,
--------------
2002 $ 50,439
2003 64,933
2004 138,510
2005 13,281
2006 445
Thereafter 1,501
--------------
$ 269,109
==============
In connection with the Kinney acquisition, the Company assumed an agreement
whereby a parking structure and the corresponding land upon which it sits are
leased under a long-term arrangement. The parking structure is accounted for as
a capital lease, and the underlying land is accounted for as an operating lease.
The original agreement called for lease payments over a twenty-year term at a
17.4% interest rate. In connection with purchase accounting, the carrying value
of the related obligation was recorded at fair value. The carrying amount of the
capital lease obligation at September 30, 2001 was $4.6 million, bearing
interest at a rate of 8.0% per annum and requiring monthly payments of
approximately $177,000. The operating lease requires a payment of approximately
$183,000 per month. The lease agreements run through December 2003.
The future minimum lease payments under all capital lease obligations are as
follows (in thousands):
YEAR ENDING
SEPTEMBER 30,
---------------
2002 $ 3,503
2003 2,889
2004 1,143
2005 403
2006 258
Thereafter 571
---------------
$ 8,767
Less interest portion at rates ranging from 6.2% to 10.0% (1,404)
Less current portion (2,898)
---------------
$ 4,465
===============
(10) CONVERTIBLE TRUST ISSUED PREFERRED SECURITIES OFFERINGS
On March 18, 1998, the Company created Central Parking Finance Trust
("Trust") which completed a private placement of 4,400,000 shares at $25.00 per
share of 5.25% convertible trust issued preferred securities ("Preferred
Securities") pursuant to an exemption from registration under the Securities Act
of 1933, as amended. The Preferred Securities represent preferred undivided
beneficial interests in the assets of Central Parking Finance Trust, a statutory
business trust formed under the laws of the State of Delaware. The Company owns
all of the common securities of the Trust. The Trust exists for the sole purpose
of issuing the Preferred Securities and investing the proceeds thereof in an
equivalent amount of 5.25% Convertible Subordinated Debentures ("Convertible
Debentures") of the Company due 2028. The net proceeds to the Company from the
Preferred Securities private placement were $106.5 million. Each Preferred
Security is entitled to receive cumulative cash distributions at an annual rate
of 5.25% (or $1.312 per share) and will be convertible at the option of the
holder thereof into shares of Company common stock at a conversion rate of
0.4545 shares of Company common stock for each Preferred Security (equivalent to
$55.00 per share of Company common stock), subject to adjustment in certain
circumstances. The Preferred Securities do not have a stated maturity date but
are subject to mandatory redemption upon the repayment of the Convertible
Debentures at their stated maturity (April 1, 2028) or upon acceleration or
earlier repayment of the Convertible Debentures.
The Company's consolidated balance sheets reflect the Preferred Securities
of the Trust as company-obligated mandatorily redeemable convertible securities
of subsidiary holding solely parent debentures.
(11) SHAREHOLDERS' EQUITY
In connection with Allright's acquisition of Allright Corporation in
October 1996, warrants to purchase 1,177 shares of Allright common stock at
$0.01 exercise price were issued. The fair value of the warrants on the date of
grant, estimated at $1,177,000, was recorded as additional purchase
consideration in the formation of Allright. As a result of the Company's merger
with Allright, such warrants represent rights to acquire 103,148 shares of
Central Parking common stock. Such warrants were exercised in fiscal 2000.
The following tables set forth the computation of basic and diluted
earnings per share:
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 2001 SEPTEMBER 30, 2000
INCOME COMMON PER INCOME COMMON PER
AVAILABLE SHARES SHARE AVAILABLE SHARES SHARE
($000'S) (000'S) AMOUNT ($000'S) (000'S) AMOUNT
--------- ------- ------ --------- ------- ------
Basic earnings per share before
extraordinary item and cumulative
effect of accounting change $ 26,111 35,803 $ 0.73 $ 36,634 36,365 $ 1.01
Effects of dilutive stock and options:
Stock option plan and warrants -- 104 -- -- 186 (0.01)
Restricted stock plan -- 108 -- -- 184 (0.01)
-------- ------ ------ -------- ------ ------
Diluted earnings per share before
extraordinary item and cumulative
effect of accounting change $ 26,111 36,015 $ 0.73 $ 36,634 36,735 $ 0.99
======== ====== ====== ======== ====== ======
YEAR ENDED
SEPTEMBER 30, 1999
INCOME COMMON PER
AVAILABLE SHARES SHARE
($000'S) (000'S) AMOUNT
--------- ------- ------
Basic earnings per share before
extraordinary item and cumulative
effect of accounting change $ 4,684 36,349 $ 0.13
Effects of dilutive stock and options:
Stock option plan and warrants -- 466 --
Restricted stock plan -- 173 --
-------- ------ ------
Diluted earnings per share before
extraordinary item and cumulative
effect of accounting change $ 4,684 36,988 $ 0.13
======== ====== ======
Weighted average common shares used for the computation of basic earnings
per share excludes certain common shares issued pursuant to the Company's
restricted stock plan and deferred compensation agreement, because under the
related agreements the holders of restricted stock will forfeit such shares if
certain employment or service requirements are not met. The effect of the
conversion of the company-obligated mandatorily redeemable securities of the
subsidiary trust has not been included in the diluted earnings per share
calculation since such securities were anti-dilutive for all periods. At
September 30, 2001, such securities were convertible into 2,000,000 shares of
common stock. Options to acquire 1,847,727, 992,352 and 481,573 shares of common
stock were excluded from the 2001, 2000 and 1999 diluted earnings per share
calculations because they were antidilutive.
(12) OPERATING LEASE COMMITMENTS
The Company and its subsidiaries conduct a significant portion of their
operations on leased premises under operating leases expiring at various dates
through 2101. Lease agreements provide for minimum payments or contingent
payments based upon a percentage of revenue or, in some cases, a combination of
both types of arrangements. Certain locations additionally require the Company
and its subsidiaries to pay real estate taxes and other occupancy expenses.
Future minimum rental commitments under operating leases and subleases are as
follows (in thousands):
YEAR ENDING FIXED SUB-RENTAL NET
SEPTEMBER 30, RENT INCOME RENT
- ---------------------------------------- ---------- ----------- ----------
2002 $ 212,613 $ 4,934 $ 207,679
2003 170,086 4,269 165,817
2004 137,140 3,255 133,885
2005 119,070 2,886 116,184
2006 96,218 2,507 93,711
Thereafter 425,950 6,891 419,059
---------- ----------- ----------
Total future operating lease commitments $1,161,077 $ 24,742 $1,136,335
========== =========== ==========
Rental expense for all operating leases, along with offsetting rental income
from subleases were as follows (in thousands):
YEAR ENDED SEPTEMBER 30,
------------------------
2001 2000 1999
-------- -------- --------
Rentals:
Minimum $239,894 $249,859 $256,751
Contingent 69,276 74,547 74,771
-------- -------- --------
Total rent expense 309,170 324,406 331,522
Less sub-lease income 15,011 13,289 12,648
-------- -------- --------
Total rent expense, net $294,159 $311,117 $318,874
======== ======== ========
(13) INCOME TAXES
Income tax expense (benefit) consists of the following (in thousands):
YEAR ENDED SEPTEMBER 30,
------------------------
2001 2000 1999
-------- -------- --------
Current:
Federal $20,827 $23,801 $12,643
Jobs credit, net of federal tax benefit (283) (325) (325)
-------- -------- --------
Net federal current tax expense 20,544 23,476 12,318
State 4,184 936 1,493
Non-U.S 1,734 1,431 1,612
-------- -------- --------
26,462 25,843 15,423
-------- -------- --------
Deferred:
Federal (3,871) (2,409) (1,929)
State (3,479) (157) (1,114)
-------- -------- --------
(7,350) (2,566) (3,043)
-------- -------- --------
Total income tax expense from continuing operations $19,112 $23,277 $12,380
======== ======== ========
Total income taxes are allocated as follows (in thousands):
YEAR ENDED SEPTEMBER 30,
------------------------
2001 2000 1999
-------- -------- --------
Income tax expense from continuing operations $19,112 $23,277 $12,380
Acquisition related expenses for tax purposes in excess of
amounts recognized for financial reporting purposes -- -- (707)
Shareholders' equity for unrealized loss on fair value of
Derivatives for financial reporting purposes (1,341) -- --
Shareholders' equity for compensation expense for tax purposes in
excess of amounts recognized for financial reporting purposes (230) (850) (635)
Extraordinary item -- (130) (587)
Cumulative effect of accounting change (171) -- --
-------- -------- --------
Total income taxes $17,370 $22,297 $10,451
======== ======== ========
Provision has not been made for U.S. or additional foreign taxes on
approximately $23.1 million, $19.7 million and $14.8 million at September 30,
2001, 2000 and 1999, respectively, of undistributed earnings of foreign
subsidiaries, as those earnings are intended to be permanently reinvested.
A reconciliation between actual income taxes and amounts computed by
applying the federal statutory rate to earnings before income taxes,
extraordinary items, and cumulative effect of accounting change is summarized as
follows (in thousands):
YEAR ENDED SEPTEMBER 30,
------------------------
2001 2000 1999
----- ----- ----
U.S. Federal statutory rate on earnings before income taxes,
minority interest, extraordinary loss and cumulative
effect of accounting change $17,054 35.0% $22,136 35.0% $ 6,887 35.0%
State and city income taxes, net of federal tax benefit 458 0.9 1,332 2.1 323 1.6
Jobs credits, net of federal tax benefit (283) (0.6) (325) (0.5) (325) (1.7)
Non-deductible goodwill amortization 3,507 7.2 3,507 5.5 3,438 17.5
Non-deductible merger costs -- -- 88 0.1 3,820 19.4
Reduction of valuation allowance -- -- (1,527) (2.4) (359) (1.8)
Tax effect of minority interest (1,226) (2.5) (1,167) (1.8) (914) (4.6)
Other (398) (0.8) (767) (1.2) (490) (2.5)
-------- ----- -------- ----- -------- -----
Income tax expense from continuing operations $19,112 39.2% $23,277 36.8% $12,380 62.9%
======== ===== ======== ===== ======== =====
Sources of deferred tax assets and deferred tax liabilities are as follows (in
thousands):
SEPTEMBER 30,
2001 2000
--------- ---------
Deferred tax assets
Net operating loss carry forwards $ 20,543 $ 18,637
Deferred and capitalized expenses 8,331 8,061
Deferred compensation expense 5,313 5,278
Impairment of assets 1,863 327
Accrued expenses and reserves 1,862 596
Temporary differences related to Edison and its management contracts 5,460 4,760
Unrecognized loss on fair value of derivative instruments 1,341 --
Capitalized leases 1,174 1,809
Deductible goodwill 1,147 7
Other 1,172 1,136
--------- ---------
Total gross deferred tax assets 48,206 40,611
--------- ---------
Deferred tax liabilities:
Property, equipment and leasehold improvements due to differences in
depreciation and purchase business combinations (43,466) (45,562)
Deferred tax gain on sales of properties (3,943) (2,908)
Other (1,016) (1,051)
--------- ---------
Total gross deferred tax liabilities (48,425) (49,521)
Valuation allowance on net operating loss carry forwards (15,279) (15,279)
--------- ---------
Net deferred tax liabilities $(15,498) $(24,189)
========= =========
As of September 30, 2001, the Company has federal net operating loss carry
forwards of approximately $41.3 million, state and city net operating loss carry
forwards of approximately $95.7 million, and foreign net operating loss carry
forwards of approximately $0.4 million which expire between 2002 and 2016. The
ability of the Company to fully utilize these net operating losses is limited
due to changes in ownership of the companies which generated these losses. These
limitations have been considered in determining the deferred tax asset valuation
allowance shown above. Based on prior taxable income, management believes that
it is more likely than not that the Company will generate sufficient taxable
income to realize deferred tax assets after giving consideration to the
valuation allowance. The valuation allowance has been provided for net operating
loss carry forwards for which recoverability is deemed to be uncertain.
(14) EMPLOYEE BENEFIT PROGRAMS
(a) Stock Plans
In August 1995, the Board of Directors and shareholders approved a stock
plan for key personnel, which included a stock option plan and a restricted
stock plan. Under this plan, incentive stock options, as well as nonqualified
options and other stock-based awards, may be granted to officers, employees and
directors. A total of 3,817,500 common shares have been reserved for issuance
under these two plans combined. Options representing 2,118,331 shares are
outstanding under the stock option plan at September 30, 2001. Options are
granted with an exercise price equal to the fair market value at the date of
grant, generally vest over a three- to four-year period and generally expire ten
years after the date of grant. At September 30, 2001, 284,590 shares had been
issued through the restricted stock plan. Expense related to the vesting of
restricted stock is recognized by the Company over the vesting period.
In August 1995, the Board of Directors and shareholders also approved a
stock plan for directors. This plan provides for the grant, upon each director's
initial election, of options to purchase 11,250 shares at an exercise price
equal to the fair market value at the date of grant to each non-employee
director. In addition, each non-employee director who has served for a minimum
of six months on the last day of each fiscal year will receive additional
options to purchase 5,000 shares on that date. A total of 475,000 shares have
been reserved for issuance under the plan. Options to purchase 182,000 shares
are outstanding under this plan at September 30, 2001.
The following table summarizes the transactions pursuant to the Company's
stock option plans for the last three fiscal years:
NUMBER WEIGHTED AVERAGE
OF SHARES EXERCISE PRICE
--------- -----------------
Outstanding at September 30, 1998 1,275,044 $ 21.81
Granted 330,370 $ 45.12
Exercised 174,836 $ 16.84
Canceled 73,532 $ 37.87
---------
Outstanding at September 30, 1999 1,357,046 $ 27.03
Granted 843,708 $ 21.26
Exercised 248,924 $ 12.51
Canceled 225,926 $ 33.08
---------
Outstanding at September 30, 2000 1,725,904 $ 25.52
Granted 1,273,529 $ 19.67
Exercised 79,897 $ 12.00
Canceled 619,205 $ 30.02
---------
Outstanding at September 30, 2001 2,300,331 $ 21.47
=========
During the third quarter of fiscal 2001 the Company initiated and completed
a stock option buyback and cancellation program. The Company repurchased
244,375 existing options from non-executive employees with exercise prices at or
above $29.25 per share. The Company recognized approximately $100 thousand as
compensation expense for the year ended September 30, 2001, related to the
option repurchases.
At September 30, 2001, 2000 and 1999, options to purchase 717,160, 739,499
and 853,601 shares of common stock, respectively, were exercisable at weighted
average exercise prices of $23.49, $25.32 and $20.32, respectively.
At September 30, 2001, information for outstanding options and options currently
exercisable is as follows:
OPTION PRICE RANGE PER SHARE
$ 8.00 $12.33-$18.26 $19.40-$27.75 $29.25-$42.81 $44.81-$51.06
---------- ------------- ------------- ------------- -------------
Options outstanding
Number of options 92,375 441,615 1,377,944 279,147 109,250
Weighted-average exercise price $ 8.00 $ 14.64 $ 20.38 $ 31.14 $ 49.61
Weighted-average contractual lives 4.0 years 8.2 years 8.7 years 7.1 years 7.0 years
Options exercisable
Number of options 92,375 159,032 224,297 169,456 72,000
Weighted-average exercise price $ 8.00 $ 13.88 $ 21.96 $ 32.05 $ 49.21
The Company accounts for these plans under Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees, and accordingly,
because such options are fixed awards, no compensation cost has been recognized.
If compensation cost for these plans had been determined consistent with SFAS
No. 123, "Accounting for Stock-Based-Compensation", the Company's net earnings
and earnings per share would have been reduced to the following pro forma
amounts:
YEAR ENDED SEPTEMBER 30,
2001 2000 1999
------- ------- ------
As reported:
Net earnings (in thousands) $25,853 $36,439 $3,682
Basic earnings per share 0.72 1.00 0.10
Diluted earnings per share 0.72 0.99 0.10
Pro Forma - SFAS 123
Net earnings (in thousands) $22,179 $33,800 $1,807
Basic earnings per share 0.62 0.93 0.05
Diluted earnings per share 0.62 0.92 0.05
The estimated weighted average fair value of the options granted were
$10.51 for 2001 option grants, $12.03 for 2000 option grants, and $16.02 for
1999 option grants, using the Black-Scholes option pricing model with the
following assumptions: weighted average dividend yield based on historic
dividend rates at the date of grant, weighted average volatility of 67% for
fiscal 2001, 70% for fiscal 2000 and 66% for fiscal 1999, weighted average risk
free interest based on the treasury bill rate of 10-year instruments at the date
of grant, and a weighted average expected life of ten years for all grants.
The Company also has an Employee Stock Purchase Plan which began on April
1, 1996, under which 450,000 shares of common stock have been reserved for
issuance. The plan allows participants to contribute up to 10% of their normal
pay (as defined in the Plan) to a custodial account for purchase of the
Company's common stock. Participants may enroll or make changes to their
enrollment annually, and they may withdraw from the plan at any time by giving
the Company written notice. Employees purchase stock annually following the end
of the plan year at a price per share equal to the lesser of 85% of the closing
market price of the common stock on the first or the last trading day of the
plan year. At September 30, 2001, 319,766 shares had been issued under this
plan.
(b) Profit-Sharing and 401(k) Plan
The Company has the Profit-Sharing and 401(k) Savings Plan that allows
eligible participants to make pretax contributions, receive Company 401(k) match
contributions and participate in Company profit-sharing contributions.
Employees 18 years or older may participate in the Plan after one year of
continuous service, if the employee was employed prior to reaching age 65.
Participants' contributions, Company 401(k) contributions and earnings thereon
immediately vest. Company profit-sharing contributions vest after two years of
continuous service at a rate of 20% per year so that participants are fully
vested at the end of seven years. Company expense associated with this plan was
$2.2 million, $2.5 million, and $2.3 million in years 2001, 2000 and 1999,
respectively.
(c) Incentive Compensation Agreements
The Company has incentive compensation agreements with certain key
employees. Participating employees receive an annual bonus based on
profitability of the operations and other factors for which they are
responsible. Incentive compensation expense is accrued during the year based
upon management's estimate of amounts earned under the related agreements.
Incentive compensation under all such agreements was approximately $6.5 million,
$6.4 million and $5.0 million, in years 2001, 2000 and 1999, respectively.
(d) Deferred Compensation Agreements
The Company has an employment agreement with its President of International
Operations in which the officer is entitled to receive upon retirement 267,750
shares of common stock which were issued in 1995 under the Company's restricted
stock plan. The Company recorded $705 thousand of deferred compensation expense
in its shareholders' equity in fiscal 1995, which was being amortized ratably
over the remaining expected term of the officer's employment. During fiscal 2001
the agreement was amended to allow the officer to receive all of the shares if
he were to leave the Company prior to his normal retirement date.
Correspondingly, the Company transferred 267,750 shares of restricted common
stock into a Rabbi Trust (the "Trust") owned by the Company. The officer has no
authority over the administration of the Trust. Transfer of these shares
resulted in an increase in liabilities and a decrease in equity of $705
thousand, including recognition of the remaining deferred compensation expense
of $335 thousand, which represented the unamortized portion of the deferred
compensation at the amendment date.
The Company has a deferred compensation agreement that entitles the
Chairman to receive annual payments of $500 thousand for a period of ten years
following his termination, for any reason other than death, in exchange for a
covenant not to compete. Thereafter, the officer is entitled to annual payments
of $300 thousand until his death and, in the event his wife survives him, she is
entitled to annual payments of $300 thousand until her death. The Company
recognizes annual compensation expense pursuant to this agreement equivalent to
the increase in the actuarially determined future obligation under the
agreement. Compensation expense associated with their agreements was
approximately $591 thousand, $255 thousand and $370 thousand in fiscal years
2001, 2000 and 1999, respectively.
Agreements with certain former key executives of Allright provide for
aggregate annual payments ranging from $20 thousand to $144 thousand per year
for periods ranging from 10 years to life, beginning when the executive retires
or upon death or disability. Under certain conditions, the amount of deferred
benefits can be reduced. Life insurance contracts with a face value of
approximately $9.2 million have been purchased to fund, as necessary, the
benefits under these agreements. The cash surrender value of the life insurance
contracts is approximately $1.9 million and $1.8 million at September 30, 2001
and September 30, 2000, respectively, and is included in other non-current
assets. The plan is a nonqualified plan and is not subject to ERISA funding
requirements. Deferred compensation costs for 2001, 2000 and 1999 were $121
thousand, $159 thousand and $557 thousand, respectively. At September 30, 2001,
the Company had recorded a liability of $6.2 million for accrued pension costs
associated with this plan. The weighted average discount rate and rate of
increase in future compensation levels used in determining the actuarial present
value of the projected benefit obligations was 8%.
(e) Deferred Unit Plan
On December 19, 1996, the Board of Directors approved the adoption of the
Company's Deferred Stock Unit Plan. Under the plan, certain key employees have
the opportunity to defer the receipt of certain portions of their cash
compensation, instead receiving shares of common stock following certain periods
of deferral. The plan is administered by a committee, appointed by the board of
directors of the Company consisting of at least two non-employee "outside"
directors of the Company. The Company reserved 375,000 shares of common stock
for issuance under the 1996 Deferred Stock Unit Plan. Participants may defer up
to 50% of their salary. As of September 30, 2001 $1.4 million of compensation
has been deferred under this plan.
(f) Employment Agreements
In connection with the Allright merger, Allright and the Company entered
into various employment agreements with employees of Allright. These agreements
included (a) retention payments to be made at the closing date of the merger if
the individuals were still employees at such date, (b) two-year employment
agreements, 50% of each employee's benefit thereunder to be paid at the closing
date of the merger and the other 50% to be paid two years after such date,
assuming the individuals were still employed with the Company, and (c)
continuity benefits which were to be paid six months after the closing date of
the merger, assuming the individuals were still employed at such date. As of
September 30, 2001, payments made under these agreements total $10.3 million.
There were no amounts accrued and unpaid related to these agreements at
September 30, 2001. Expenses associated with the two-year agreements have been
recognized in fiscal 2001, 2000 and 1999 in the amounts of $358 thousand, $612
thousand and $317 thousand, respectively.
(15) RELATED PARTIES
The Company leases two properties from an entity 50% owned by the Company's
chairman for $290 thousand per year for a 10-year term and pays percentage rent
to the entity. Total rent expense, including percentage rent, was $355 thousand,
$434 thousand and $531 thousand in 2001, 2000 and 1999, respectively. The
Company will receive 25% of the gain in the event of a sale of these properties
during the term of the lease pursuant to the lease agreements. Management
believes that such transactions have been on terms no less favorable to the
Company than those that could have been obtained from unaffiliated persons.
In connection with the acquisition of Kinney, the Company entered into a
consulting agreement with a director of the Company. The Company paid $200
thousand to the director pursuant to this agreement during fiscal 2001.
Additionally, the Company has entered into a limited partnership agreement with
the same director whereby the director has agreed to seek new business
opportunities in the form of leases and management contracts and renewals of
existing leases and contracts as requested by the Company. During the fiscal
years ended September 30, 2001, 2000 and 1999, the Company recognized expense of
$391 thousand, $220 thousand and $418 thousand, respectively, in connection with
this agreement.
During fiscal 2000, a former director of the Company exercised a purchase
option on a property owned by the Company. The purchase price was $8.3 million.
The Company recognized a gain of $2.7 million in connection with the sale of the
property.
(16) CONTINGENCIES
The Company is subject to various legal proceedings and claims, which arise
in the ordinary course of its business. In the opinion of management, the
ultimate liability with respect to those proceedings and claims will not
materially affect the financial position, operations, or liquidity of the
Company. The Company maintains liability insurance coverage for individual
claims in excess of various dollar amounts, subject to annual aggregate limits.
In connection with the initial formation of Allright and its acquisition of
Allright Corporation, Nedinco Delaware Incorporated ("Nedinco") and Hang Lung
Development Company Ltd. agreed to indemnify Allright for certain costs and
liabilities incurred in connection with or arising out of Allright's
Corporation's operations prior to October 31, 1996. A $21.9 million letter of
credit supports this indemnification.
(17) SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments made for interest and income taxes were as follows (in
thousands):
YEAR ENDED SEPTEMBER 30,
2001 2000 1999
------- ------- -------
Interest $18,511 $28,635 $32,971
Income tax $27,207 $15,594 $12,181
(18) BUSINESS SEGMENTS
The Company's business activities consist of domestic and foreign
operations. Foreign operations are conducted in the United Kingdom, Canada,
Spain and Ireland. The Company also conducts business through joint ventures in
Mexico, Germany, Poland and Chile. Revenues attributable to foreign operations
were less than 10% of consolidated revenues for each of fiscal years 2001, 2000
and 1999. In 2001, the United Kingdom and Canada account for 61.4% and 28.5% of
total foreign revenues, respectively. Therefore, the Company includes all
foreign operations in a single reporting segment.
A summary of information about the Company's operations by segment is as follows
(in thousands):
YEAR ENDED SEPTEMBER 30,
2001 2000 1999
-------- ---------- ----------
Total revenues:
Domestic $665,619 $ 697,388 $ 696,604
Foreign 39,540 33,541 33,868
-------- ---------- ----------
Consolidated $705,159 $ 730,929 $ 730,472
======== ========== ==========
Operating earnings:
Domestic $ 58,605 $ 73,725 $ 34,942
Foreign 5,692 5,372 5,739
-------- ---------- ----------
Consolidated $ 64,297 $ 79,097 $ 40,681
======== ========== ==========
Earnings before income taxes, minority interest,
Extraordinary item and cumulative effect of
accounting change:
Domestic $ 41,366 $ 57,780 $ 13,834
Foreign 7,359 5,465 5,842
-------- ---------- ----------
Consolidated $ 48,725 $ 63,245 $ 19,676
======== ========== ==========
Identifiable assets:
Domestic $953,645 $ 997,523 $1,041,372
Foreign 33,236 24,782 23,205
-------- ---------- ----------
Consolidated $986,881 $1,022,305 $1,064,577
======== ========== ==========
The Company is managed based on segments administered by senior vice
presidents. These segments are generally organized geographically, with
exceptions depending on the needs of specific regions. The following is a
summary of revenues, costs, and other expenses by segment for the years ended
September 30, 2001, 2000 and 1999 (in thousands). During fiscal year 2001, the
Company realigned certain locations among segments. All prior years segment
data has been reclassified to conform to the new segment alignment.
YEAR ENDED SEPTEMBER 30, 2001
-----------------------------
ONE TWO THREE FOUR FIVE SIX INT'L
-------- --------- -------- -------- -------- -------- --------
Revenues:
Parking $58,122 $264,805 $34,373 $75,795 $57,894 $65,908 $33,086
Management contract 14,280 26,223 10,166 16,438 7,760 11,269 6,454
-------- --------- -------- -------- -------- -------- --------
Total revenues 72,402 291,028 44,539 92,233 65,654 77,177 39,540
Costs and expenses:
Cost of parking 52,725 229,941 31,272 69,415 50,971 59,924 28,717
Cost of management contracts 6,625 10,539 4,664 7,010 3,000 4,471 123
General and administrative 6,186 23,112 2,843 5,245 5,613 5,562 4,882
Goodwill and non-compete amortization 224 8,287 450 878 1,001 12 71
-------- --------- -------- -------- -------- -------- --------
Total costs and expenses 65,760 271,879 39,229 82,548 60,585 69,669 33,793
Property-related (losses) gains, net (2,804) (10,128) (114) 404 (4) (145) (55)
-------- --------- -------- -------- -------- -------- --------
Operating earnings 3,838 9,021 5,196 10,089 5,065 7,363 5,692
Other income (expense):
Interest income (155) (18,423) (285) (55) (2,256) 46 342
Interest expense (92) (1,054) (130) (463) (151) (30) (244)
Dividends - convertible securities -- -- -- -- -- -- --
Equity in partnership and joint venture earnings -- -- -- -- -- -- 1,569
-------- --------- -------- -------- -------- -------- --------
Earnings (loss) before income tax, minority
interest and cumulative effect of
Accounting change $ 3,591 $(10,456) $ 4,781 $ 9,571 $ 2,658 $ 7,379 $ 7,359
======== ========= ======== ======== ======== ======== ========
Income tax expense
Earnings before minority interest and cumulative
effect of accounting change
Minority interest, net of tax
Earnings before cumulative effect of
Accounting change
Cumulative effect of accounting
change, net of tax
Net earnings
Identifiable assets $(4,427) $ 73,770 $15,470 $19,184 $ 3,610 $19,714 $33,236
======== ========= ======== ======== ======== ======== ========
ALL OTHERS
AND GEN'L
CORP TOTAL
------------ ---------
Revenues:
Parking $ 13,433 $603,416
Management contract 9,153 101,743
------------ ---------
Total revenues 22,586 705,159
Costs and expenses:
Cost of parking (9,394) 513,571
Cost of management contracts 4,756 41,188
General and administrative 13,664 66,807
Goodwill and non-compete amortization 1,118 12,041
------------ ---------
Total costs and expenses 10,144 633,607
Property-related (losses) gains, net 5,591 (7,255)
------------ ---------
Operating earnings 18,033 64,297
Other income (expense):
Interest income 26,593 5,807
Interest expense (18,404) (20,568)
Dividends - convertible securities (5,886) (5,886)
Equity in partnership and joint venture earnings 3,506 5,075
------------ ---------
Earnings (loss) before income tax, minority
interest and cumulative effect of
Accounting change $ 23,842 48,725
============
Income tax expense 19,112
---------
Earnings before minority interest and cumulative
effect of accounting change 29,613
Minority interest, net of tax (3,502)
---------
Earnings before cumulative effect of
Accounting change 26,111
Cumulative effect of accounting
change, net of tax (258)
---------
Net earnings $ 25,853
=========
Identifiable assets $ 826,324 $986,881
============ =========
YEAR ENDED SEPTEMBER 30, 2000
-----------------------------
ONE TWO THREE FOUR FIVE SIX INT'L
-------- --------- -------- -------- -------- -------- --------
Revenues:
Parking $63,501 $270,781 $37,807 $ 88,871 $61,483 $65,242 $27,807
Management contract 14,366 26,228 10,141 16,285 8,158 12,503 5,734
-------- --------- -------- --------- -------- -------- --------
Total revenues 77,867 297,009 47,948 105,156 69,641 77,745 33,541
Costs and expenses:
Cost of parking 56,207 229,998 35,529 80,714 55,005 57,612 23,660
Cost of management contracts 4,667 8,368 4,102 7,325 3,704 4,989 41
General and administrative 6,947 20,718 2,781 6,059 4,779 5,627 4,398
Goodwill and non-compete amortization 193 8,488 450 884 1,041 12 70
Merger costs -- -- -- -- -- - -- --
-------- --------- -------- --------- -------- -------- --------
Total costs and expenses 68,014 267,572 42,862 94,982 64,529 68,240 28,169
Property-related (losses) gains, net (3,843) (366) (653) (1,398) (214) (356) --
-------- --------- -------- --------- -------- -------- --------
Operating earnings 6,010 29,071 4,433 8,776 4,898 9,149 5,372
Other income (expense):
Interest income (152) (18,407) (329) (97) (2,290) 96 311
Interest expense (90) (1,589) (158) (335) (193) (2) (361)
Dividends - convertible securities -- -- -- -- -- -- --
Equity in partnership and joint venture earnings -- -- -- -- -- -- 143
-------- --------- -------- --------- -------- -------- --------
Earnings before income tax, minority
interest and extraordinary item $ 5,768 $ 9,075 $ 3,946 $ 8,344 $ 2,415 $ 9,243 $ 5,465
======== ========= ======== ========= ======== ======== ========
Income tax expense
Earnings before minority interest and
Extraordinary item
Minority interest, net of tax
Earnings before extraordinary item
Extraordinary item, net of tax
Net earnings
Identifiable assets $ 1,442 $156,327 $25,213 $ 23,436 $ 7,876 $21,018 $24,782
======== ========= ======== ========= ======== ======== ========
ALL OTHERS
AND GEN'L
CORP TOTAL
------------ ---------
Revenues:
Parking $ 13,174 $ 628,666
Management contract 8,848 102,263
------------ -----------
Total revenues 22,022 730,929
Costs and expenses:
Cost of parking (10,041) 528,684
Cost of management contracts 3,074 36,270
General and administrative 20,637 71,946
Goodwill and non-compete amortization 982 12,120
Merger costs 3,747 3,747
------------ -----------
Total costs and expenses 18,399 652,767
Property-related (losses) gains, net 7,765 935
------------ -----------
Operating earnings 11,388 79,097
Other income (expense):
Interest income 27,772 6,904
Interest expense (24,276) (27,004)
Dividends - convertible securities (6,012) (6,012)
Equity in partnership and joint venture earnings 10,117 10,260
------------ -----------
Earnings before income tax, minority
interest and extraordinary item $ 18,989 63,245
============
Income tax expense 23,277
-----------
Earnings before minority interest and
Extraordinary item 39,968
Minority interest, net of tax (3,334)
-----------
Earnings before extraordinary item 36,634
Extraordinary item, net of tax (195)
-----------
Net earnings $ 36,439
===========
Identifiable assets $ 762,211 $1,022,305
============ ===========
YEAR ENDED SEPTEMBER 30, 1999
-----------------------------
ONE TWO THREE FOUR FIVE SIX INT'L
-------- --------- -------- -------- -------- -------- --------
Revenues:
Parking $73,269 $261,412 $43,904 $ 98,344 $59,159 $66,203 $27,471
Management contract 11,357 20,591 8,413 14,190 8,077 9,638 6,397
-------- --------- -------- --------- -------- -------- --------
Total revenues 84,626 282,003 52,317 112,534 67,236 75,841 33,868
Costs and expenses:
Cost of parking 64,666 222,074 40,375 84,785 54,590 58,483 24,155
Cost of management contracts 2,845 6,023 3,505 5,332 2,856 2,549 3
General and administrative 6,317 20,502 2,677 6,911 4,990 4,416 3,957
Goodwill and non-compete amortization 169 8,114 450 875 861 12 2
Merger costs -- -- -- -- -- -- --
-------- --------- -------- --------- -------- -------- --------
Total costs and expenses 73,997 256,713 47,007 97,903 63,297 65,460 28,117
Property-related gains (losses), net 11 (1,254) 36 78 (2) (41) (12)
-------- --------- -------- --------- -------- -------- --------
Operating earnings 10,640 24,036 5,346 14,709 3,937 10,340 5,739
Other income (expense):
Interest income (401) (18,605) (209) (134) (2,334) (108) 321
Interest expense 49 (1,891) (130) (329) (186) (43) (357)
Dividends - convertible securities -- -- -- -- -- -- --
Equity in partnership and joint venture earnings -- 746 -- -- -- -- 139
-------- --------- -------- --------- -------- -------- --------
Earnings (loss) before income tax, minority
interest and extraordinary item $10,288 $ 4,286 $ 5,007 $ 14,246 $ 1,417 $10,189 $ 5,842
======== ========= ======== ========= ======== ======== ========
Income tax expense
Earnings before minority interest and
Extraordinary item
Minority interest, net of tax
Earnings before extraordinary item
Extraordinary item, net of tax
Net earnings
Identifiable assets $(1,191) $163,713 $26,241 $ 23,794 $ 8,809 $19,418 $23,205
======== ========= ======== ========= ======== ======== ========
ALL OTHERS
AND GEN'L
CORP TOTAL
------------ ---------
Revenues:
Parking $ 9,324 $ 639,086
Management contract 12,723 91,386
------------ -----------
Total revenues 22,047 730,472
Costs and expenses:
Cost of parking (13,960) 535,168
Cost of management contracts 4,627 27,740
General and administrative 27,542 77,312
Goodwill and non-compete amortization 1,124 11,607
Merger costs 40,970 40,970
------------ -----------
Total costs and expenses 60,303 692,797
Property-related gains (losses), net 4,190 3,006
------------ -----------
Operating earnings (34,066) 40,681
Other income (expense):
Interest income 28,109 6,639
Interest expense (24,064) (26,951)
Dividends - convertible securities (5,926) (5,926)
Equity in partnership and joint venture earnings 4,348 5,233
------------ -----------
Earnings (loss) before income tax, minority
interest and extraordinary item $ (31,599) 19,676
============
Income tax expense 12,380
-----------
Earnings before minority interest and
Extraordinary item 7,296
Minority interest, net of tax (2,612)
-----------
Earnings before extraordinary item 4,684
Extraordinary item, net of tax (1,002)
-----------
Net earnings $ 3,682
===========
Identifiable assets $ 800,588 $1,064,577
============ ===========
Segment One encompasses the western region of the United States, plus Vancouver,
BC.
Segment Two encompasses the northeastern United States, including New York City,
New Jersey, Boston and Philadelphia.
Segment Three encompasses the southeastern region of the United States.
Segment Four encompasses the midwestern and southern United States, including
Texas, Kentucky, Tennessee and Louisiana.
Segment Five encompasses the mideastern United States, including Washington,
D.C., Baltimore, Cleveland and Pittsburgh. It also includes Puerto Rico.
Segment Six encompasses the midwestern region of the United States, as well as
western Pennsylvania and New York
International encompasses all Europe and Canada locations (except for
Vancouver), as well as Mexico and South America.
All others and general corporate encompasses home office, eliminations, certain
owned real estate and certain partnerships.
(19) SUBSEQUENT EVENTS
On October 1, 2001, the Company purchased substantially all of the assets
of USA Parking Systems, Inc, for $11.5 million. The purchase included
approximately 65 management contracts located primarily in south Florida and
Puerto Rico.
On October 1, 2001, the Company purchased 100% of the common stock of
Universal Park Holdings ("Universal") for $470 thousand. Universal manages
parking locations in 6 different National Parks in the western United States.
On October 1, 2001, the Company purchased a 70% interest in Lexis Systems,
Inc. ("Lexis") for $350 thousand. Lexis manufactures and sells automated pay
stations for parking facilities.
In November 2001, the Company exercised its rights under a buy-sell
provision of the partnership agreement to sell its 50% interest in Civic
Parking, LLC. The sale is scheduled to close in January 2002. The Company
expects to receive net proceeds of approximately $18 million from this sale and
will recognize a related gain of approximately $3 million in fiscal 2002.
In December 2001, the city of Houston, Texas completed condemnation
proceedings on a property owned by the Company. The Company received net
proceeds of $11.4 million from this condemnation and will recognize a gain of
$4.6 million in the first quarter of fiscal 2002.
Subsequent to September 30, 2001, the Company sold certain other owned
properties with a combined carrying value of $431 thousand. The Company received
proceeds of $724 thousand for these sales and will recognize a gain of $293
thousand in the first quarter of fiscal 2002.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
Information concerning this Item is incorporated by reference to the
Company's definitive proxy materials for the Company's 2002 Annual Meeting of
Shareholders.
ITEM 11. EXECUTIVE COMPENSATION
Information concerning this Item is incorporated by reference to the
Company's definitive proxy materials for the Company's 2002 Annual Meeting of
Shareholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information concerning this Item is incorporated by reference to the
Company's definitive proxy materials for the Company's 2002 Annual Meeting of
Shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information concerning this Item is incorporated by reference to the
Company's definitive proxy materials for the Company's 2002 Annual Meeting of
Shareholders.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) and (2) Financial Statements and Financial Statement Schedules
Financial statements and schedules of the Company and its subsidiaries
required to be included in Part II, Item 8, are indexed on page 27.
(b) (3) Exhibits The exhibits are listed in the Index to Exhibits which appears
immediately following the signature page.
(c) Reports on Form 8-K
On October 23, 2001, the Company filed a current report on form 8-K
announcing its forecasted operating results for the fourth quarter of fiscal
2001, incorporating the text of a press release dated October 15, 2001.
On November 27, 2001 the Company filed a current report on form 8-K
announcing its results for the quarter and year ended September 30, 2001,
incorporating the text of a press release on that date.
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Amounts in thousands Additions
---------
Balance at Charged to Charged to Balance at
Beginning of Costs and Other End of
Description Period Expenses Accounts Deductions Period
- ------------------------------- ------------- ----------- ----------- ------------ -----------
Allowance for Doubtful Accounts
Year ended September 30, 1999 $ 111 $ -- $ -- $ 111 $ --
Year ended September 31, 2000 -- 300 -- -- 300
Year ended September 31, 2001 300 400 -- 226 474
Deferred Tax Valuation Account
Year ended September 30, 1999 $ 17,363 $ 1,220 -- $ (1,219) $ 17,364
Year ended September 31, 2000 17,364 -- -- (2,085) 15,279
Year ended September 31, 2001 15,279 -- -- -- 15,279
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
Principal Amount
Final Periodic Face Carrying of Loans Subject
Interest Maturity Payment Prior Amount of Amount of to Delinquent
Description Rate Date Terms Liens Mortgage Mortgage Principal or Interest
- ------------------ -------------------- -------- ----------------- ----- ----------- ----------- ---------------------
Mortgage note 1-month LIBOR + 3/15/05 $108,250/month None $13,300,000 $13,145,794 None
secured by parking 1.625% with swap (including swap)
garages to convert to fixed with balance of
rate at 8/91% $ 12,691,671 due
at maturity
SEE ACCOMPANYING INDEPENDENT AUDITOR'S REPORT.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CENTRAL PARKING CORPORATION
Date December 21, 2001 By: /s/Hiram A. Cox
-----------------
Hiram A. Cox
Senior Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.
SIGNATURE TITLE
- --------- -----
/s/Monroe J. Carell, Jr. Chairman and Director
- ------------------------------
Monroe J. Carell, Jr.
/s/William J. Vareschi, Jr. Vice Chairman, Chief Executive Officer
- ------------------------------ and Director
William J. Vareschi, Jr.
/s/James H. Bond President of International Operations
- ------------------------------ and Director
James H. Bond
/s/Hiram A. Cox Senior Vice President and
- ------------------------------ Chief Financial Officer
Hiram A. Cox (Principal Accounting Officer)
/s/William S. Benjamin Director
- ------------------------------
William S. Benjamin
/s/Cecil Conlee Director
- ------------------------------
Cecil Conlee
/s/Lewis Katz Director
- ------------------------------
Lewis Katz
/s/Edward G. Nelson Director
- ------------------------------
Edward G. Nelson
s/William C. O'Neil, Jr. Director
- ------------------------------
William C. O'Neil, Jr.
/s/Richard H. Sinkfield Director
- -------------------------
Richard H. Sinkfield
/s/Julia Carell Stadler Director
- -------------------------
Julia Carell Stadler
EXHIBIT INDEX
EXHIBIT
NUMBER DOCUMENT
- ------ --------
2 Plan of Recapitalization, effective October 9, 1997 (Incorporated by
reference to Exhibit 2 to the Company's Registration Statement No. 33-95640
on Form S-1).
2.1 Agreement and Plan of Merger dated September 21, 1998, by and among the
Registrant, Central Merger Sub, Inc., Allright Holdings, Inc., Apollo Real
Estate Investment Fund II, L.P. and AEW Partners, L.P. (Incorporated by
reference to Exhibit 2.1 to the Company's Registration Statement No.
333-66081 on Form S-4 filed on October 21, 1998).
2.2 Amendment dated as of January 5, 1999, to the Agreement and Plan of Merger
dated September 21, 1998 by and among the Registrant, Central Merger Sub,
Inc., Allright Holdings, Inc., Apollo Real Estate Investment Fund II, L.P.
and AEW Partners, L.P. (Incorporated by reference to Exhibit 2.1 to the
Company's Registration Statement No. 333-66081 on Form S-4 filed on October
21, 1998, as amended).
2.3 Acquisition Agreement and Plan of Merger dated as of November 7, 1997, by
and between the Registrant and Kinney System Holding Corp and a subsidiary
of the Registrant (Incorporated by reference to the Company's Current
Report on Form 8-K filed on February 17, 1998).
3.1 (a) Amended and Restated Charter of the Registrant (Incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement No.
333-23869 on Form S-3).
(b) Articles of Amendment to the Charter of Central Parking Corporation
increasing the authorized number of shares of common stock, par value $0.01
per share, to one hundred million (Incorporated by reference to Exhibit 2
to the Company's 10-Q for the quarter ended March 31, 1999).
3.2 Amended and Restated Bylaws of the Registrant (Incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement No. 333-23869 on Form
S-3).
4.1 Form of Common Stock Certificate (Incorporated by reference to Exhibit 4.1
to the Company's Registration Statement No. 33-95640 on Form S-1).
4.4 Registration Rights Agreement dated as of September 21, 1998 by and between
the Registrant, Apollo Real Estate Investment Fund II, L.P., AEW Partners,
L.P. and Monroe J. Carell, Jr., The Monroe Carell Jr.Foundation, Monroe
Carell Jr. 1995 Grantor Retained Annuity Trust, Monroe Carell Jr. 1994
Grantor Retained Annuity Trust, The Carell Children's Trust, The 1996
Carell Grandchildren's Trust, The Carell Family Grandchildren 1990 Trust,
The Kathryn Carell Brown Foundation, The Edith Carell Johnson Foundation,
The Julie Carell Stadler Foundation, 1997 Carell Elizabeth Brown Trust,
1997 Ann Scott Johnson Trust, 1997 Julia Claire Stadler Trust, 1997 William
Carell Johnson Trust, 1997 David Nicholas Brown Trust and 1997 George
Monroe Stadler Trust (Incorporated by reference to Exhibit 4.4 to the
Company's Registration Statement No. 333-66081 filed on October 21, 1998).
4.4 Amendment dated January 5, 1999 to the Registration Rights Agreement dated
as of September 21, 1998, by and between the Registrant, Apollo Real Estate
Investment fund II, L.P., AEW Partners, L.P. and Monroe J. Carell, Jr., The
Monroe Carell Jr. Foundation, Monroe Carell Jr. 1995 Grantor Retained
Annuity Trust, Monroe Carell Jr. 1994 Grantor Retained Annuity Trust, The
Carell Children's Trust, The 1996 Carell Grandchildren's Trust, The Carell
Family Grandchildren 1990 Trust, The Kathryn Carell Brown Foundation, The
Edith Carell Johnson Foundation, The Julie Carell Stadler Foundation, 1997
Carell Elizabeth Brown Trust, 1997 Ann Scott Johnson Trust, 1997 Julia
Claire Stadler Trust, 1997 William Carell Johnson Trust, 1997 David
Nicholas Brown rust and 1997 George Monroe Stadler Trust. (Incorporated by
reference to Exhibit 4.4.1 to the Company's Registration Statement No.
333-66081 filed on October 21, 1998, as amended).
4.5 Indenture dated March 18, 1998 between the registrant and Chase Bank of
Texas, National Association, as Trustee regarding up to $113,402,050 of
5-1/4 % Convertible Subordinated Debentures due 2028. (Incorporated by
reference to Exhibit 4.5 to the Registrant's Registration Statement No.
333-52497 on Form S-3).
4.6 Amended and Restated Declaration of Trust of Central Parking Finance Trust
dated as of March 18, 1998. (Incorporated by reference to Exhibit 4.5 to
the Registrant's Registration Statement No. 333-52497 on Form S-3).
4.7 Preferred Securities Guarantee Agreement dated as of March 18, 1998 by and
between the Registrant and Chase Bank of Texas, national Association as
Trustee (Incorporated by reference to Exhibit 4.7 to the Registrant's
Registration Statement No. 333-52497 on Form S-3).
4.8 Common Securities Guarantee Agreement dated March 18, 1998 by the
Registrant. (Incorporated by reference to Exhibit 4.9 to 333-52497 on Form
S-3).
10.1 Executive Compensation Plans and Arrangements
(a) 1995 Incentive and Nonqualified Stock Option Plan for Key Personnel
(Incorporated by reference to Exhibit 10.1 to the Company's Registration
Statement No. 33-95640 on Form S-1).
(b) Amendment to the 1995 Incentive and Nonqualified Stock Option Plan for
Key Personnel increasing the number of shares licensed for issuance under
the plan to 3,817,500 (incorporated by reference to Exhibit 10.1 (b) of the
Company's Annual Report on Form 10-K for the year ended September 30,
2000).
(c) Form of Option Agreement under Key Personnel Plan (Incorporated by
reference to Exhibit 10.2 to the Company's Registration Statement No.
33-95640 on Form S-1).
(d) 1995 Restricted Stock Plan (Incorporated by reference to Exhibit 10.5.1
to the Company's Registration Statement No. 33-95640 on Form S-1.)
(e) Form of Restricted Stock Agreement (Incorporated by reference to
Exhibit 10.5.2 to the Company's Registration Statement No.33-95640 on Form
S-1.)
(f) Form of Employment Agreements with Executive Officers (filed herewith).
(g) Monroe J. Carell, Jr. Employment Agreement (Incorporated by reference
to Exhibit 10.8 to the Company's Registration Statement No. 33-95640 on
Form S-1.)
(h) Monroe J. Carell, Jr. Revised Deferred Compensation Agreement, as
amended (Incorporated by reference to Exhibit 10.9 to the Company's
Registration Statement No.33-95640 on Form S-1.)
(j) Performance Unit Agreement between Central Parking Corporation and
James H. Bond (Incorporated by reference to Exhibit 10.11.1 to the
Company's Registration Statement No. 33-95640 on Form S-1.)
(k) Modification of Performance Unit Agreement of James H. Bond
(Incorporated by reference to Exhibit 10.1 (j) to the Company's Annual
Report on Form 10-K filed on December 27, 1997).
(l) Second modification of Performance Unit Agreement of James H. Bond
(incorporated by reference to Exhibit 10.1 (k) to the Company's Report on
Form 10-Q for the period ended March 31, 2001).
(m) Hiram A. Cox Employment Agreement dated as of June 4, 2001 (filed
herewith).
(n) Deferred Stock Unit Plan (filed herewith).
(o) William J. Vareschi Employment Agreement dated as of February 28, 2001
(incorporated by reference to Exhibit 10.1 (o) to the company's Report on
Form 10-Q for the period ended June 30, 2001).
(p) James H. Bond Employment Agreement dated as of May 31, 2001
(incorporated by reference to Exhibit 10.1 (p) to the company's Report on
Form 10-Q for the period ended June 30, 2001).
(q) Emanuel J. Eads Employment Agreement dated as of October 1, 2000
(incorporated by reference to Exhibit 10.1 (q) to the company's Report on
Form 10-Q for the period ended June 30, 2001).
(r) Gregory A. Susick Employment Agreement dated as of October 1, 2000
(incorporated by reference to Exhibit 10.1 (r) to the company's Report on
Form 10-Q for the period ended June 30, 2001).
(s) Jeff L. Wolfe Employment Agreement dated as of October 1, 2000
(incorporated by reference to Exhibit 10.1 (s) to the company's Report on
Form 10-Q for the period ended June 30, 2001).
10.2 (a) 1995 Nonqualified Stock Option Plan for Directors (Incorporated by
reference to Exhibit 10.3 to the Company's Registration Statement No.
33-95640 on Form S-1.)
(b) Amendment to the 1995 Nonqualified Stock Option Plan for Directors
increasing the number of shares reserved for issuance under the plan to
475,000 (filed herewith).
10.3 Form of Option Agreement under Directors plan (Incorporated by reference to
Exhibit 10.4 to the Company's Registration Statement No. 33-95640 on Form
S-1.)
10.4 Form of Indemnification Agreement for Directors (Incorporated by reference
to Exhibit 10.12 to the Company's Registration Statement No. 33-95640 on
Form S-1.)
10.5 Indemnification Agreement for Monroe J. Carell, Jr. (Incorporated by
reference to Exhibit 10.13 to the Company's Registration Statement No.
33-95640 on Form S-1.)
10.6 Form of Management Contract (filed herewith).
10.7 Form of Lease (filed herewith).
10.8 1998 Employee Stock Purchase Plan (Incorporated by reference to Exhibit
10.16 to the Company's Registration Statement No. 33-95640 on Form S-1.)
10.9 Exchange Agreement between the Company and Monroe J. Carell, Jr.
(Incorporated by reference to Exhibit 10.18 to the Company's Registration
Statement No. 33-95640 on Form S-1.)
10.10 $400 Million Credit Agreement dated as of March 19, 1999 by and among
various banks with Bank of America, N.A., as Agent, and Central Parking
Corporation and certain affiliates. (Incorporated by reference to Exhibit
10.11 of the Company's Report on Form 10-K for the period ended September
30, 1999.)
10.11 Letter Amendment dated as of June 25, 1999 to Credit Agreement dated as of
March 19, 1999, by and among various banks with Bank of America, N.A., as
Agent, and Central Parking Corporation and certain affiliates.
(Incorporated by reference to Exhibit 10.11 of the Company's Report on Form
10-K for the period ended September 30, 1999.)
10.12 Letter Amendment dated as of October 27, 1999 to Credit Agreement dated as
of March 19, 1999, by and among various banks with Bank of America, N.A.,
as Agent, and Central Parking Corporation and certain affiliates.
(Incorporated by reference to Exhibit 10.11 of the Company's Report on Form
10-K for the period ended September 30, 1999.)
10.13 Form of Amendment dated as of December 28, 1999 to $400 million Credit
Agreement dated as of March 19, 1999, by and among various banks with Bank
of America, N.A., as Agent, and Central Parking Corporation and certain
affiliates. (Incorporated by reference to Exhibit 10.11 of the Company's
Report on Form 10-K for the period ended September 30, 1999.)
10.14 Amended and Restated Credit Agreement dated as of February 14, 2000, by
and among various banks, with Bank of America, N.A., as Agent and Central
Parking Corporation and certain affiliates. (Incorporated by reference to
the Company's Report on Form 10-Q for the quarter ended March 31, 2000.)
10.15 Amended and Restated Credit Agreement dated as of June 16, 2000, by and
among various banks, with Bank of America, N.A. as Agent and Central
Parking Corporation and certain affiliates (incorporated by reference to
Exhibit 10.15 to the Company's Report on Form 10-K for the period ended
September 30, 2000).
10.16 Letter Amendment to the Amended and Restated Credit Agreement dated as of
August 13, 2001, by and among various banks, with Bank of America, N.A., as
Agent and Central Parking Corporation and certain affiliates (filed
herewith).
10.17 Consulting Agreement dated as of February 12, 1998, by and between Central
Parking Corporation and Lewis Katz. (Incorporated by reference to Exhibit
10.20 of the Company's Report on Form 10-K for the period ended September
30, 1999.)
10.18 Limited Partnership Agreement dated as of August 11, 1999, by and between
CPS of the Northeast, Inc. and Arizin Ventures, L.L.C. (Incorporated by
reference to Exhibit 10.21 of the Company's Report on Form 10-K for the
period ended September 30, 1999.)
10.19 Registration Rights Agreement dated as of February 12, 1998, by and among
Central Parking Corporation, Lewis Katz and Saul Schwartz. (Incorporated by
reference to Exhibit 10.22 of the Company's Report on Form 10-K for the
period ended September 30, 1999.)
10.20 Shareholders' Agreement and Agreement Not to Compete by and among Central
Parking Corporation, Monroe J. Carell, Jr., Lewis Katz and Saul Schwartz
dated as of February 12, 1998. (Incorporated by reference to Exhibit 10.23
of the Company's Report on Form 10-K for the period ended September 30,
1999.)
10.21 Lease Agreement dated as of October 6, 1995, by and between The Carell
Family LLC and Central Parking System of Tennessee, Inc. (Alloway Parking
Lot). (Incorporated by reference to Exhibit 10.24 of the Company's Report
on Form 10-K for the period ended September 30, 1999.)
10.22 First Amendment to Lease Agreement dated as of July 29, 1997, by and
between The Carell Family LLC and Central Parking System of Tennessee, Inc.
(Alloway Parking Lot). (Incorporated by reference to Exhibit 10.25 of the
Company's Report on Form 10-K for the period ended September 30, 1999.)
10.23 Lease Agreement dated as of October 6, 1995 by and between The Carell
Family LLC and Central Parking System of Tennessee, Inc. (Second and Church
Parking Lot). (Incorporated by reference to Exhibit 10.26 of the Company's
Report on Form 10-K for the period ended September 30, 1999.)
10.24 First Amendment to Lease Agreement dated as of October 6, 1995, by and
between The Carell Family LLC and Central Parking System of Tennessee, Inc.
(Second and Church Parking Lot). (Incorporated by reference to Exhibit
10.27 of the Company's Report on Form 10-K for the period ended September
30, 1999.)
10.25 Prospectus and offering document for 2,625,000 shares of Common Stock
dated February 17, 1998. (Incorporated by reference to the Company's
Registration Statement No. 233-23869 on Form S-3).
10.26 Transaction Support Agreement by Monroe J. Carell, Jr., the Registrant,
Kathryn Carell Brown, Julia Carell Stadler and Edith Carell Johnson to
Allright Holdings, Inc., Apollo Real Estate Investment Fund II, L.P. and
AEW Partners, L.P. dated September 21, 1998. (Incorporated by reference to
Exhibit 2.1 to the Company's Registration Statement No. 333-66081 filed on
October 23, 1998).
10.30 Form of Transaction Support Agreement by certain shareholders of the
Registrant to Allright Holdings, Inc., Apollo Real Estate Investment Fund
II, L.P., and AEW Partners, L.P., dated September 21, 1998. (Incorporated
by reference to Exhibit 2.1 to the Company's Registration Statement No.
333-66081 filed on October 23, 1998).
10.31 Form of Transaction Support Agreement by certain shareholders of Allright
Holdings, Inc. to the Registrant and Central Merger Sub, Inc. dated
September 21, 1998. (Incorporated by reference to Exhibit 2.1 to the
Company's Registration Statement No. 333-66081 filed on October 23, 1998).
21 Subsidiaries of the Registrant (filed herewith).
23 Consent of KPMG LLP (filed herewith).
EXHIBIT 10.1 (F)
EMPLOYMENT CONTRACT
THIS AGREEMENT made and entered into effective this 1st day of ________, 200_,
by and between CENTRAL PARKING SYSTEM, INC., a Tennessee corporation with its
principal place of business in Nashville, Tennessee ("EMPLOYER"), and
_______________ . ("EXECUTIVE").
W I T N E S S E T H:
WHEREAS, EMPLOYER desires to induce EXECUTIVE to serve or continue to serve as
an executive officer of EMPLOYER;
WHEREAS, EXECUTIVE has access to trade secrets and confidential information of
EMPLOYER including, but not limited to, the terms of, and the parties to,
EMPLOYER's leases, management contracts and other contracts pursuant to which
EMPLOYER operates its business, and EXECUTIVE has the ability to influence the
goodwill of EMPLOYER with such parties;
WHEREAS, in consideration of EXECUTIVE's increased compensation and promotion to
the position of Senior Vice President, his continued employment at will upon the
terms and conditions hereinafter set forth, and the payment of the amounts
hereinafter set forth, including but not limited to, the Termination Amount (as
hereinafter defined), EXECUTIVE has agreed to be bound by such terms and
conditions, including but not limited to, the restrictive covenants set forth
hereinafter;
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, EMPLOYER and EXECUTIVE agree as follows:
(1) TITLE. Subject to the terms and conditions of this Agreement, EMPLOYER
does hereby employ EXECUTIVE during the Term (as defined below) as Senior Vice
President.
(2) DUTIES. EXECUTIVE agrees to serve in such capacity, and to perform all
the duties required thereof. EXECUTIVE'S duties and powers in that capacity
will be determined by EMPLOYER, and are expected to include, but not be limited
to, managing EMPLOYER's operations in certain geographical areas and managing
certain administrative functions as may be determined from time to time by
EMPLOYER.
(3) COMPENSATION. During the Term, EMPLOYER agrees to pay EXECUTIVE for
said services a base salary ("Base Salary") of $__________ gross per year. Base
Salary shall be payable in accordance with the ordinary payroll practices of
EMPLOYER but no less frequently than biweekly. Any increase in Base Salary
shall be in the discretion of EMPLOYER and, as so increased, shall constitute
"Base Salary" hereunder. During the Term, in addition to his Base Salary,
EXECUTIVE shall, with respect to each fiscal year beginning on or about October
1, be eligible to receive an annual bonus (the "Bonus") based upon the
achievement of objectives determined by the Company and in accordance with the
Company's bonus program as may be in effect from time-to-time. For the fiscal
year beginning on October 1, 2001, EXECUTIVE's target Bonus shall be
$___________. EXECUTIVE may elect to draw, in advance, up to fifty percent
(50%) of the Bonus through the course of EMPLOYER'S fiscal year. Should such
advance exceed the amount actually due EXECUTIVE based on the computation of
EXECUTIVE'S Bonus, EXECUTIVE agrees to repay the borrowed amount upon
notification by EMPLOYER.
It is EMPLOYER'S policy that bonuses will not be earned by two people
during a job change transition period. Therefore, in reference to EXECUTIVE'S
position, if the outgoing manager is to continue working for EMPLOYER in a
similar position or is promoted, then the outgoing manager will continue to earn
toward a bonus until leaving the current position, and the incoming manager will
not begin to earn toward a bonus until the day after the outgoing manager's last
day in the position. If the outgoing manager resigns, retires, or is removed
from the position, then the incoming manager will begin to earn toward the bonus
from the time he or she commences work and the outgoing person will not have
earned any bonus attributable to the period in which he has not worked in the
position.
(4) ADDITIONAL COMPENSATION AND BENEFITS. During the Term, EXECUTIVE shall
be eligible to participate in any additional compensation and benefits plans or
programs maintained by EMPLOYER from time to time in which other senior
executives of EMPLOYER participate on terms comparable to those applicable to
such other senior executives generally (commensurate with EXECUTIVE's position
with EMPLOYER).
(5) STOCK OPTIONS. During the Term, EXECUTIVE shall be eligible to receive
stock options under EMPLOYER'S 1995 Incentive and Nonqualified Stock Option Plan
for Key Employees or substitute plan (the "Plan") in amounts and on terms
commensurate with EXECUTIVE'S performance and position with EMPLOYER. In
accordance with the Plan, such stock options shall have a term of ten (10) years
and shall vest as determined by the Board of Directors at the date of grant;
provided, however, that in the event of EXECUTIVE'S termination without Cause or
for Good Reason (as such terms are defined below), all unvested options held by
EXECUTIVE on the termination date shall continue to vest during the one-year
period following termination in accordance with the vesting schedule for such
options and EXECUTIVE shall have the right to exercise any vested options during
such one-year period.
(6) TERM. This Agreement shall continue through September 30, 200_;
provided, however, that the Term shall be automatically renewed for a one-year
period on October 1, 200_, and on each anniversary thereof and, as so renewed,
shall constitute the "Term" hereunder, unless EMPLOYER has notified EXECUTIVE in
writing prior to the thirty-day period ending on the expiration of the then Term
that such Term shall not be so renewed and that EXECUTIVE's employment shall be
terminated. Notwithstanding the foregoing, this Agreement may be terminated at
any time by either EMPLOYER or EXECUTIVE upon thirty days' prior written
notice (except that such notice is not required in the event EXECUTIVE's
employment is terminated for Cause (as defined below)); provided, however,
EMPLOYER retains in its sole discretion the option to substitute for the thirty
(30) days' written notice of termination an amount of pay, with normal
withholdings, as pay in lieu of notice. Notwithstanding any of the foregoing,
Sections 9, 10, 11, 12, 13 and 14 shall survive the termination of this
Agreement.
(7) EXTENT OF SERVICES. EXECUTIVE shall devote his entire attention and
energy to the business and affairs of EMPLOYER and shall not be engaged in any
other business activity, whether or not such business activity is pursued for
gain, profit or other pecuniary advantage, unless EMPLOYER consents to
EXECUTIVE's involvement in such business activity in writing. This restriction
shall not be construed as preventing EXECUTIVE from investing his assets in a
form or manner that will not require EXECUTIVE's services in the operation of
any of the companies in which such investments are made.
(8) TERMINATION OF EMPLOYMENT.
8.1 Termination without Cause; Resignation for Good Reason. (a) In the
----------------------------------------------------------
event that EXECUTIVE's employment is terminated (i) by EMPLOYER other than for
Cause (as defined below), including without limitation a termination of this
Agreement pursuant to a notice by EMPLOYER that the then Term will not be
renewed, and other than as a result of EXECUTIVE's death or Permanent Disability
(as defined below), or (ii) by EXECUTIVE for Good Reason (as defined below),
EXECUTIVE shall receive the following amounts:
(i) a cash lump sum payment in respect of EXECUTIVE's Base Salary
earned but not yet paid (the "Compensation Payment"), in each case through the
effective date of such termination;
(ii) such payments, if any, under applicable plans or programs,
including but not limited to those referred to in Section 4 hereof, to which he
is entitled pursuant to the terms of such plans or programs;
(iii) an amount (the "Termination Amount") equal to one hundred
and twenty-five percent (125%) of EXECUTIVE's Base Salary; and
(iv) the Bonus calculated in accordance with the EMPLOYER'S bonus
program for the fiscal year in which his termination of employment occurs,
prorated by a fraction, the numerator of which is the number of days from the
beginning of the then current fiscal year through and including the date of his
termination and the denominator of which is 365, less any amounts drawn in
advance under Section 3 of this Agreement.
(b) The Compensation Payment shall be paid by EMPLOYER to
EXECUTIVE within thirty (30) days after the termination of EXECUTIVE's
employment by check payable to the order of EXECUTIVE or by wire transfer to an
account specified by EXECUTIVE. The Termination Amount shall be payable in
equal installments during the one-year period following termination of
employment in accordance with the ordinary payroll practices of EMPLOYER, but no
less frequently than bi-weekly. The Bonus shall be paid following the end of
the fiscal year in which EXECUTIVE's employment terminated in accordance with
EMPLOYER's ordinary practices, but in no event later than December 15 of such
year. Notwithstanding anything else herein to the contrary, EXECUTIVE shall not
be entitled to receive the Termination Amount in the event he violates any of
the covenants set forth in Sections 9 or 10 of this Agreement.
(c) For purposes of this Agreement, "Good Reason" shall mean a
reduction by EMPLOYER in excess of fifteen (15%) in the amount of EXECUTIVE's
Base Salary or Bonus Potential (as defined below) unless the reduction in the
amount of Bonus Potential is part of a program in which the Bonus Potential of
at least ninety percent (90%) of the senior executives of EMPLOYER is reduced.
Bonus Potential means the amount of Bonus EXECUTIVE would earn if he meets the
budget objectives or other objectives as may be set forth in the bonus plan as
amended from time-to-time. It is understood that the actual amount of Bonus
earned by EXECUTIVE can vary from year to year depending upon performance and
such variance, regardless of amount, shall not constitute "Good Reason." It is
further understood that the amount of EXECUTIVE's Bonus Potential may be reduced
for factors such as the closure or loss of cities or locations, sale of cities
or properties, or as a result of economic conditions and that any such
reduction, regardless of amount, shall not constitute "Good Reason."
8.2 Permanent Disability. In the event that EXECUTIVE becomes disabled
--------------------
during the Term to an extent which entitles him to benefits under EMPLOYER's
long-term disability benefit plan applicable to senior executive officers
generally as in effect on the date hereof ("Permanent Disability"), Executive's
employment shall terminate automatically, and EXECUTIVE shall receive or
commence receiving, as soon as practicable:
(i) amounts payable pursuant to the terms of a long-term
disability insurance policy or similar arrangement which EMPLOYER maintains
during the Term;
(ii) the Compensation Payment;
(iii) such payments, if any, under applicable plans or programs,
including but not limited to those referred to in Section 4 hereof, to which he
is entitled pursuant to the terms of such plans or programs; and
(iv) the Bonus calculated in accordance with the EMPLOYER's bonus
program for the fiscal year in which his termination occurs prorated by a
fraction, the numerator of which is the number of days from the beginning of the
then current fiscal year through and including the date of his termination and
the denominator of which is 365, less any amounts drawn in advance under Section
3 of this Agreement.
.
8.3 Death. In the event of EXECUTIVE's death during the Term,
-----
EXECUTIVE's employment shall terminate automatically, and EXECUTIVE's estate or
designated beneficiaries shall receive or commence receiving, as soon as
practicable:
(i) any death benefits provided under the employee benefit plans,
programs and practices referred to in Section 4 hereof, in accordance with their
terms;
(ii) the Compensation Payment;
(iii) such payments, if any, under applicable plans or programs,
including but not limited to those referred to in Section 4 hereof, to which
EXECUTIVE's estate or designated beneficiaries are entitled pursuant to the
terms of such plans or programs; and
(iv) the Bonus calculated in accordance with the EMPLOYER's bonus
program for the fiscal year in which his death occurs, prorated by a fraction,
the numerator of which is the number of days from the beginning of the then
current fiscal year through and including the date of his death and the
denominator of which is 365, less any amounts drawn in advance under Section 3
of this Agreement.
8.4 Resignation Without Good Reason. In the event that EXECUTIVE's
----------------------------------
employment is terminated by EXECUTIVE other than for Good Reason and other than
as a result of EXECUTIVE's death or Permanent Disability, EXECUTIVE shall
receive the following amounts:
(i) the Compensation Payment;
(ii) such payments, if any, under applicable plans or programs, including
but not limited to those referred to in Section 4 hereof, to which he is
entitled pursuant to the terms of such plans or programs; and
(iii) the Bonus calculated in accordance with EMPLOYER's bonus program for
the fiscal year in which his termination of employment occurs, prorated by a
fraction, the numerator of which is the number of days from the beginning of the
then current fiscal year through and including the date of his termination and
the denominator of which is 365, less any amounts drawn in advance under Section
3 of this Agreement.
8.5 Termination for Cause. EMPLOYER shall have the right to terminate
-----------------------
the employment of EXECUTIVE for Cause. In the event that EXECUTIVE's employment
is terminated by EMPLOYER for Cause, EXECUTIVE shall only be entitled to
receive the following amounts and shall not be entitled to the payment of any
other compensation otherwise included under this Agreement:
(i) the Compensation Payment; and
(ii) such payments, if any, under applicable plans or programs,
including but not limited to those referred to in Section 4 hereof, to which he
is entitled pursuant to the terms of such plans or programs.
After the termination of EXECUTIVE's employment under this Section 8.5, the
obligations of EMPLOYER under this Agreement to make any further payments or
provide any benefits specified herein to EXECUTIVE shall thereupon cease and
terminate.
For purposes of this Agreement, "Cause" shall be defined as (i) the
commission by EXECUTIVE of an act involving theft, embezzlement, fraud or
intentional mishandling of EMPLOYER funds; (ii) conviction of a criminal offense
which adversely affects EXECUTIVE's job-related responsibilities; (iii) a
violation by EXECUTIVE of the covenants set forth in Sections 9 or 10 of this
Agreement; or (iv) EXECUTIVE's deliberate and intentional continuing refusal to
substantially perform his duties and obligations, which continues beyond ten
days after a written demand for substantial performance is delivered to
EXECUTIVE by EMPLOYER.
(9) RESTRICTIVE COVENANTS.
9.1. Covenant Not-to-Compete. During the term of this Agreement and
------------------------
for a period of one (1) year after termination of employment (or one (1) year
after EMPLOYER is granted injunctive relief to enforce the provisions of this
Section, whichever is later), EXECUTIVE shall not, directly or indirectly,
either as an individual for his own account or as a consultant, partner, joint
venturer, employee, agent, officer, director or shareholder, engage in the same
or similar business of EMPLOYER or any of its parents, subsidiaries,
partnerships, joint ventures, affiliates or related companies (collectively
referred to hereinafter as "Affiliated Entities") within fifty (50) miles of the
perimeter of any county or any independent city in which he is rendering or has
rendered services to or for EMPLOYER during the one-year period prior to
termination of his employment.
9.2 Non-solicitation and Other Covenants. During the term of this
---------------------------------------
Agreement and for a period of two (2) years after termination of employment (or
two (2) years after EMPLOYER is granted injunctive relief to enforce the
provisions of this Section, whichever is later), EXECUTIVE shall not, directly
or indirectly, either as an individual for his own account or as a consultant,
partner, joint venturer, employee, agent, officer, director or shareholder:
(i) solicit or attempt to solicit any clients, customers or
landlords of EMPLOYER or any of its Affiliated Entities existing on the date of
EXECUTIVE's termination with the intent or purpose to perform services for such
clients, customers or landlords which are the same or similar to those provided
by EMPLOYER or any of its Affiliated Entities, or encourage or attempt to
encourage any such clients, customers or landlords to not continue or otherwise
modify adversely its business relationship with EMPLOYER or its Affiliated
Entities;
(ii) enter into any lease, sublease, license agreement,
services agreement, option agreement, management or operating agreement relating
to, or otherwise acquire any rights with respect to, any of the parking
facilities managed or operated by EMPLOYER or any of its Affiliated Entities on
the date of EXECUTIVE's termination; or
(iii) engage, hire, solicit or attempt to solicit for the purpose
of hiring or engaging, as an employee, agent, consultant, independent
contractor, or in any other capacity, any of EMPLOYER's or its Affiliated
Entities' employees or consultants.
EXECUTIVE acknowledges and agrees that the provisions of Sections 9 and 10 of
this Agreement are intended to protect EMPLOYER's interest in certain
confidential information and established landlord, client and other contractual
relationships and goodwill and that such provisions are reasonable and valid in
geographical and temporal scope and in all other respects.
(10) CONFIDENTIAL INFORMATION. EXECUTIVE acknowledges and agrees that all
information of a technical or business nature, such as know-how, trade secrets,
business plans, data processes, techniques, financial information, information
regarding clients, customers, landlords, suppliers, consultants, joint venture
partners and employees, contracts, leases, inventions, sales and marketing
concepts, discoveries, formulae, patterns, and devices (collectively, the
"Confidential Information'') acquired by EXECUTIVE in the course of his
employment under this Agreement is valuable proprietary information of EMPLOYER.
EXECUTIVE agrees that such Confidential Information, whether in written, verbal
or model form, shall not be disclosed to anyone outside the employment of
EMPLOYER without EMPLOYER's written consent unless the Confidential Information
has been made generally available to the public through no fault of the
EXECUTIVE.
(11) RETURN OF COMPANY PROPERTY. Upon termination of EXECUTIVE's employment
with or without Cause, EXECUTIVE shall immediately return and deliver to
EMPLOYER and shall not retain any originals or copies of any books, papers,
price lists, customer contracts, bids, customer lists, files, notebooks,
computer files, computer hardware or software, or any other documents or
computer records which are company property, which contains Confidential
Information, or which otherwise relate to EXECUTIVE's performance of duties
under this Agreement. EXECUTIVE further acknowledges and agrees that all such
documents and computer records are EMPLOYER's sole and exclusive property.
(12) NOTICE. All notices, demands and communications required, desired or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given on the date received, if delivered personally, or on the third
day after mailing, if sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the parties at the addresses set
forth below or to such other person at such location as either party hereto may
subsequently designate in a similar manner:
EMPLOYER: EXECUTIVE:
Central Parking System, Inc.
2401 21st Avenue South, Suite 200
Nashville, Tennessee 37212
Attn: Monroe J. Carell, Jr.
(13) CONSTRUCTION OF AGREEMENT. This Agreement shall be interpreted,
construed and governed by and under the laws of the State of Tennessee without
reference to the choice of law doctrine of such state, and EXECUTIVE
unconditionally submits to the jurisdiction of the courts located in the State
of Tennessee in all matters relating to or arising from this Agreement, except
to the extent that an issue is subject to the arbitration clause set out herein.
a. If any provision or clause of this Agreement or the application
thereof to either party is held to be invalid by a court of competent
jurisdiction, then such provision shall be severed herefrom, and such invalidity
shall not affect any other provision of this Agreement, the balance of which
shall remain and have its intended full force and effect.
b. In the event that the provisions of Sections 9 or 10 of this
Agreement shall ever be deemed to exceed the time or geographical limits
permitted by applicable law, then such provisions shall be reformed to the
maximum time and geographical limits permitted by applicable law.
c. References herein to "Sections" or "Subsections" mean the various
Sections and subsections of this Agreement. The headings and titles of the
Sections of this Agreement are not a part of this Agreement, but are for
convenience only and are not intended to define, limit or construe the contents
of the various Sections. The term "including" means including, without
limitation, unless the context clearly indicates otherwise.
d. If EXECUTIVE defaults in the performance of the covenants,
agreements, or other obligations described in Sections 9 or 10 of this
Agreement, then in addition to any and all other rights or remedies which
EMPLOYER may have against the EXECUTIVE, (i) EXECUTIVE will be liable to and
will pay to EMPLOYER a sum equal to EMPLOYER's court costs and the reasonable
fees of its attorneys and their support staff incurred in enforcing the
covenants, agreements and other obligations set out in Sections 9 or 10 of this
Agreement; and (ii) EMPLOYER shall be entitled to discontinue the payment of the
Termination Amount and to institute an action to recover any portion of the
Termination Amount already paid under this Agreement.
e. EXECUTIVE acknowledges and agrees that it is impossible to measure
completely in money the damages which will accrue to EMPLOYER if EXECUTIVE shall
breach or be in default of the provisions set forth in Sections 9 or 10 of this
Agreement. Accordingly, if any action or proceeding is instituted by or on
behalf of EMPLOYER to enforce any provisions in Sections 9 or 10 of this
Agreement, EXECUTIVE hereby waives any claim or defense thereto that EMPLOYER
has an adequate remedy at law or that EMPLOYER has not been, or is not being,
irreparably injured thereby. The rights and remedies of EMPLOYER pursuant to
this Section are cumulative, in addition to, and shall not be deemed to exclude
any other right or remedy which EMPLOYER may have pursuant to this Agreement or
otherwise, at law or in equity, including, without limitation, the rights and
remedies available to EMPLOYER under Tennessee statutory or common law.
(14) ARBITRATION. EXECUTIVE and EMPLOYER knowingly and voluntarily agree to
submit to binding arbitration any claims, disputes, or controversies arising out
of or relating to this employment relationship or this Agreement, or alleged
breach thereof, including any present or future claim of employment
discrimination by EXECUTIVE under either federal or state law. Although
workers' compensation issues are not within the scope of this provision,
workers' compensation retaliation claims are intended to be arbitrable.
Arbitration shall serve as the exclusive forum for claims described above, with
the exception that EMPLOYER need not submit issues relating to a breach or
threatened breach of Sections 9 or 10 to arbitration.
Any arbitration under this Section must be instituted within the applicable
statute of limitations governing the dispute under state or federal law. The
laws of the State of Tennessee shall govern all issues relating to such
arbitration, including but not limited to, the applicability and enforceability
of this arbitration provision, without reference to the choice of law doctrine
of such state. Such arbitration shall be conducted in Nashville, Tennessee (or
such other location designated by EMPLOYER) in accordance with the governing
rules of the Federal Mediation and Conciliation Service ("FMCS") then in effect,
except for any rule in conflict with this Section. If for any reason FMCS
cannot provide a panel from which to select an arbitrator, EMPLOYER may utilize
any other arbitrator selection services, including the American Arbitration
Association. One arbitrator shall be selected, using an alternating-strike
method, from a list of arbitrators provided by FMCS. EXECUTIVE and EMPLOYER
will have the right of representation of their own choosing at such hearing as
well as the right to present and cross examine witnesses and to submit relevant
evidence. Both parties shall have the right, unless waived at the hearing, to
file a post-hearing brief and the selected arbitrator shall not limit this
right. Judgment may be entered on the arbitrator's award in any court of
competent jurisdiction.
The arbitrator shall have full and complete power to settle any claim presented,
including any federal or state claim of employment discrimination or retaliation
by EXECUTIVE, and to fashion an appropriate remedy. However, the arbitrator
shall not have the power to amend or modify this Agreement. In any dispute
concerning the termination of EXECUTIVE, the arbitrator may not award
reinstatement or any other remedy unless he or she determines that EMPLOYER was
not entitled to terminate EXECUTIVE under this Agreement. Fees and costs for
the arbitration will be split equally between the parties; however, each party
will be responsible for their own attorney's fees.
(15) ENTIRE AGREEMENT. This Agreement contains the entire agreement between
the parties hereto with respect to the subject matter hereof, and there are no
understandings, representations or warranties of any kind between the parties
except as expressly set forth herein.
H:\Employment Contracts\SVP Contract
12/21/01 Page 13
(16) NO ORAL NOTIFICATION. This Agreement may not be modified except by a
writing duly signed by both parties hereto.
(17) NO ASSIGNMENT. Neither this Agreement nor any right or obligation of
EXECUTIVE hereunder may be assigned by EXECUTIVE without the prior written
consent of EMPLOYER. Subject thereto, this Agreement and the covenants and
conditions herein contained shall inure to the benefit of and shall be binding
upon the parties hereto and their respective successors and permitted assigns.
(18) All references herein to payment or sums of money shall mean in U.S.
currency only. All references herein to calendar year, month, week or day shall
mean the calendar and parts thereof as observed in the U.S. All references
herein to date and time shall mean the date and time in Nashville, Tennessee.
(19) This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which shall constitute one and the
same agreement.
(20) The waiver by either party of a breach or default by the other party of
any provision of this Agreement shall not operate or be construed as a waiver of
any other, continuing or subsequent breach or default by such party.
WITNESS our hands the day and date first above written.
EMPLOYER: EXECUTIVE:
CENTRAL PARKING SYSTEM, INC.
___________________________
.
By:
Title: _________________________________
12/21/01 Page 11
EXHIBIT 10.1 (M)
EMPLOYMENT CONTRACT
THIS AGREEMENT made and entered into effective this 4th day of June, 2001, by
and between CENTRAL PARKING SYSTEM, INC., a Tennessee corporation with its
principal place of business in Nashville, Tennessee ("EMPLOYER"), and Hiram A.
Cox ("EXECUTIVE").
W I T N E S S E T H:
WHEREAS, EMPLOYER desires to induce EXECUTIVE to serve as an executive officer
of EMPLOYER;
WHEREAS, EXECUTIVE will have access to trade secrets and confidential
information of EMPLOYER including, but not limited to, the terms of, and the
parties to, EMPLOYER's leases, management contracts and other contracts pursuant
to which EMPLOYER operates its business, and EXECUTIVE will have the ability to
influence the goodwill of EMPLOYER with such parties;
WHEREAS, in consideration of his employment at will upon the terms and
conditions hereinafter set forth, and the payment of the amounts hereinafter set
forth, including but not limited to, the Termination Amount (as hereinafter
defined), EXECUTIVE has agreed to be bound by such terms and conditions,
including but not limited to, the restrictive covenants set forth hereinafter;
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, EMPLOYER and EXECUTIVE agree as follows:
(1) TITLE. Subject to the terms and conditions of this Agreement, EMPLOYER
does hereby employ EXECUTIVE during the Term (as defined below) as Senior Vice
President and Chief Financial Officer.
(2) DUTIES. EXECUTIVE agrees to serve in such capacity, and to perform all
the duties required thereof. EXECUTIVE'S duties and powers in that capacity
will be determined by EMPLOYER, and are expected to include, but not be limited
to (i) ensuring that EMPLOYER's financial reporting processes are timely and
accurate and its accounting practices are in conformity with GAAP; (ii) ensuring
the adequacy of the EMPLOYER's financial controls and policies; (iii) assisting
EMPLOYER in evaluating new business opportunities and potential acquisitions and
joint ventures; (iv) establishing and maintaining relationships with bankers,
securities analysts and the financial community as a whole; (v) directing the
selection, hiring, training and development of all personnel within the
financial function; (vi) directing the budgeting process; and (vii) performing
such other duties from time to time as may be required by EMPLOYER.
(3) COMPENSATION. During the Term, EMPLOYER agrees to pay EXECUTIVE for
said services a base salary ("Base Salary") of $350,000 gross per year (which
Base Salary for FY2001 shall be prorated based on the period of time actually
worked by Executive in FY2001). Base Salary shall be payable in accordance with
the ordinary payroll practices of EMPLOYER but no less frequently than biweekly.
Any increase in Base Salary shall be in the discretion of EMPLOYER and, as so
increased, shall constitute "Base Salary" hereunder. During the Term, in
addition to his Base Salary, EXECUTIVE shall, with respect to each fiscal year
beginning on or about October 1, be eligible to receive an annual bonus (the
"Bonus") with a target amount of $200,000 based on the achievement of Employer
and individual objectives and in accordance with EMPLOYER's bonus program as may
be in effect from time-to-time. Notwithstanding the above, EXECUTIVE shall be
entitled to a bonus of $200,000 for the first twelve months of employment.
EXECUTIVE may elect to draw, in advance, up to fifty percent (50%) of the Bonus
through the course of EMPLOYER'S fiscal year. Should such advance exceed the
amount actually due EXECUTIVE based on the computation of EXECUTIVE'S Bonus,
EXECUTIVE agrees to repay the borrowed amount upon notification by EMPLOYER.
It is EMPLOYER'S policy that bonuses will not be earned by two people
during a job change transition period. Therefore, in reference to EXECUTIVE'S
position, if the outgoing manager is to continue working for EMPLOYER in a
similar position or is promoted, then the outgoing manager will continue to earn
toward a bonus until leaving the current position, and the incoming manager will
not begin to earn toward a bonus until the day after the outgoing manager's last
day in the position. If the outgoing manager resigns, retires, or is removed
from the position, then the incoming manager will begin to earn toward the bonus
from the time he or she commences work and the outgoing person will not have
earned any bonus attributable to the period in which he has not worked in the
position.
(4) ADDITIONAL COMPENSATION AND BENEFITS. During the Term, EXECUTIVE shall
be eligible to participate in any additional compensation and benefits plans or
programs maintained by EMPLOYER from time to time in which other senior
executives of EMPLOYER participate on terms comparable to those applicable to
such other senior executives generally (commensurate with EXECUTIVE's position
with EMPLOYER). EXECUTIVE shall be eligible to participate in the Deferred
Stock Unit Plan upon commencement of employment.
(5) STOCK OPTIONS. Upon the commencement of EXECUTIVE's employment,
EXECUTIVE shall receive a grant of 30,000 non-qualified options to purchase
EMPLOYER's common stock under EMPLOYER'S 1995 Incentive and Nonqualified Stock
Option Plan for Key Employees (the "Plan") at an exercise price of $18.26 per
share. In accordance with the Plan, such stock options shall have a term of ten
(10) years and shall vest ratably over a four-year period; provided, however,
that in the event of EXECUTIVE'S termination without Cause or for Good Reason
(as such terms are defined below), all unvested options held by EXECUTIVE on the
termination date shall continue to vest during the one-year period following
termination in accordance with the vesting schedule for such options and
EXECUTIVE shall have the right to exercise any vested options during such
one-year period.
(6) DEFERRED STOCK UNITS. Upon commencement of employment, EXECUTIVE shall
receive 20,000 deferred stock units ("DSUs"). The DSUs shall be granted subject
to the terms and conditions set forth in Exhibit A to this Agreement.
(7) TERM. This Agreement shall continue through September 30, 2002;
provided, however, that the Term shall be automatically renewed for a one-year
period on October 1, 2002, and on each anniversary thereof and, as so renewed,
shall constitute the "Term" hereunder, unless EMPLOYER has notified EXECUTIVE in
writing prior to the thirty-day period ending on the expiration of the then Term
that such Term shall not be so renewed and that EXECUTIVE's employment shall be
terminated. Notwithstanding the foregoing, this Agreement may be terminated at
any time by either EMPLOYER or EXECUTIVE upon thirty days' prior written notice
(except that such notice is not required in the event EXECUTIVE's employment is
terminated for Cause (as defined below)); provided, however, EMPLOYER retains in
its sole discretion the option to substitute for the thirty (30) days' written
notice of termination an amount of pay, with normal withholdings, as pay in lieu
of notice. Notwithstanding any of the foregoing, Sections 10, 11, 12, 13, 14
and 15 shall survive the termination of this Agreement.
(8) EXTENT OF SERVICES. EXECUTIVE shall devote his entire attention and
energy to the business and affairs of EMPLOYER and shall not be engaged in any
other business activity, whether or not such business activity is pursued for
gain, profit or other pecuniary advantage, unless EMPLOYER consents to
EXECUTIVE's involvement in such business activity in writing. This restriction
shall not be construed as preventing EXECUTIVE from investing his assets in a
form or manner that will not require EXECUTIVE's services in the operation of
any of the companies in which such investments are made.
(9) TERMINATION OF EMPLOYMENT.
9.1 Termination without Cause; Resignation for Good Reason. (a) In the
----------------------------------------------------------
event that EXECUTIVE's employment is terminated (i) by EMPLOYER other than for
Cause (as defined below), including without limitation a termination of this
Agreement pursuant to a notice by EMPLOYER that the then Term will not be
renewed, and other than as a result of EXECUTIVE's death or Permanent Disability
(as defined below), or (ii) by EXECUTIVE for Good Reason (as defined below),
EXECUTIVE shall receive the following amounts:
(i) a cash lump sum payment in respect of EXECUTIVE's Base Salary
earned but not yet paid (the "Compensation Payment"), through the effective date
of such termination;
(ii) such payments, if any, under applicable plans or programs,
including but not limited to those referred to in Section 4 hereof, to which he
is entitled pursuant to the terms of such plans or programs;
(iii) an amount (the "Termination Amount") equal to one hundred
and twenty-five percent (125%) of EXECUTIVE's Base Salary; and
(iv) the Bonus in respect of the fiscal year in which his
termination of employment occurs, prorated by a fraction, the numerator of which
is the number of days from the beginning of the then current fiscal year through
and including the date of his termination and the denominator of which is 365,
less any amounts drawn in advance under Section 3 of this Agreement.
(b) The Compensation Payment shall be paid by EMPLOYER to
EXECUTIVE within thirty (30) days after the termination of EXECUTIVE's
employment by check payable to the order of EXECUTIVE or by wire transfer to an
account specified by EXECUTIVE. The Termination Amount shall be payable in
equal installments during the one-year period following termination of
employment in accordance with the ordinary payroll practices of EMPLOYER, but no
less frequently than bi-weekly. The Bonus shall be paid following the end of
the fiscal year in which EXECUTIVE's employment terminated in accordance with
EMPLOYER's ordinary practices, but in no event later than December 15 of such
year. Notwithstanding anything else herein to the contrary, EXECUTIVE shall not
be entitled to receive the Termination Amount in the event he violates any of
the covenants set forth in Sections 10 or 11 of this Agreement.
(c) For purposes of this Agreement, "Good Reason" shall mean a
reduction by EMPLOYER in excess of fifteen (15%) in the amount of EXECUTIVE's
Base Salary or Bonus Potential (as defined below) unless the reduction in the
amount of Bonus Potential is part of a program in which the Bonus Potential of
at least ninety percent (90%) of the senior executives of EMPLOYER is reduced.
Bonus Potential means the amount of Bonus EXECUTIVE would earn if he meets the
budget objectives or other objectives as may be set forth in the bonus plan as
amended from time-to-time. It is understood that the actual amount of Bonus
earned by EXECUTIVE can vary from year to year depending upon performance and
such variance, regardless of amount, shall not constitute "Good Reason." It is
further understood that the amount of EXECUTIVE's Bonus Potential may be reduced
for factors such as the closure or loss of cities or locations, sale of cities
or properties, or as a result of economic conditions and that any such
reduction, regardless of amount, shall not constitute "Good Reason."
9.2 Permanent Disability. In the event that EXECUTIVE becomes disabled
--------------------
during the Term to an extent which entitles him to benefits under EMPLOYER's
long-term disability benefit plan applicable to senior executive officers
generally as in effect on the date hereof ("Permanent Disability"), Executive's
employment shall terminate automatically, and EXECUTIVE shall receive or
commence receiving, as soon as practicable:
(i) amounts payable pursuant to the terms of a long-term
disability insurance policy or similar arrangement which EMPLOYER maintains
during the Term;
(ii) the Compensation Payment;
(iii) such payments, if any, under applicable plans or programs,
including but not limited to those referred to in Section 4 hereof, to which he
is entitled pursuant to the terms of such plans or programs; and
(iv) the Bonus in respect of the fiscal year in which his
termination occurs prorated by a fraction, the numerator of which is the number
of days from the beginning of the then current fiscal year through and including
the date of his termination and the denominator of which is 365, less any
amounts drawn in advance under Section 3 of this Agreement.
.
9.3 Death. In the event of EXECUTIVE's death during the Term,
-----
EXECUTIVE's employment shall terminate automatically, and EXECUTIVE's estate or
designated beneficiaries shall receive or commence receiving, as soon as
practicable:
(i) any death benefits provided under the employee benefit plans,
programs and practices referred to in Section 4 hereof, in accordance with their
terms;
(ii) the Compensation Payment;
(iii) such payments, if any, under applicable plans or programs,
including but not limited to those referred to in Section 4 hereof, to which
EXECUTIVE's estate or designated beneficiaries are entitled pursuant to the
terms of such plans or programs; and
(iv) the Bonus in respect of the fiscal year in which his death
occurs, prorated by a fraction, the numerator of which is the number of days
from the beginning of the then current fiscal year through and including the
date of his death and the denominator of which is 365, less any amounts drawn in
advance under Section 3 of this Agreement.
9.4 Resignation Without Good Reason. In the event that EXECUTIVE's
----------------------------------
employment is terminated by EXECUTIVE other than for Good Reason and other than
as a result of EXECUTIVE's death or Permanent Disability, EXECUTIVE shall
receive the following amounts:
(i) the Compensation Payment;
(ii) such payments, if any, under applicable plans or programs, including
but not limited to those referred to in Section 4 hereof, to which he is
entitled pursuant to the terms of such plans or programs; and
(iii) the Bonus in respect of the fiscal year in which his termination of
employment occurs, prorated by a fraction, the numerator of which is the number
of days from the beginning of the then current fiscal year through and including
the date of his termination and the denominator of which is 365, less any
amounts drawn in advance under Section 3 of this Agreement.
9.5 Termination for Cause. EMPLOYER shall have the right to terminate
-----------------------
the employment of EXECUTIVE for Cause. In the event that EXECUTIVE's employment
is terminated by EMPLOYER for Cause, EXECUTIVE shall only be entitled to
receive the following amounts and shall not be entitled to the payment of any
other compensation otherwise included under this Agreement:
(i) the Compensation Payment; and
(ii) such payments, if any, under applicable plans or programs,
including but not limited to those referred to in Section 4 hereof, to which he
is entitled pursuant to the terms of such plans or programs.
After the termination of EXECUTIVE's employment under this Section 9.5, the
obligations of EMPLOYER under this Agreement to make any further payments or
provide any benefits specified herein to EXECUTIVE shall thereupon cease and
terminate.
For purposes of this Agreement, "Cause" shall be defined as (i) the
commission by EXECUTIVE of an act involving theft, embezzlement, fraud or
intentional mishandling of EMPLOYER funds; (ii) conviction of a criminal offense
which adversely affects EXECUTIVE's job-related responsibilities; (iii) a
violation by EXECUTIVE of the covenants set forth in Sections 10 or 11 of this
Agreement; or (iv) EXECUTIVE's deliberate and intentional continuing refusal to
substantially perform his duties and obligations, which continues beyond ten
days after a written demand for substantial performance is delivered to
EXECUTIVE by EMPLOYER.
9.6 Termination Without Cause or Resignation for Good Reason Following
-------------------------------------------------------------------
a Change in Control. (a) In the event that EXECUTIVE's employment is
- -----------------------
terminated within the two-year period following a Change in Control (as defined
- --------
below) (i) by EMPLOYER other than for Cause, including without limitation a
termination of this Agreement pursuant to a notice by EMPLOYER that the then
current Term will not be renewed, or (ii) by EXECUTIVE for Good Reason,
EXECUTIVE shall receive the following amounts:
(i) the Compensation Payment;
(ii) an amount equal to two times Base Salary;
(iii) such payment, if any, under applicable plans or programs,
including but not limited to those referred to in Section 4 hereof, to which he
is entitled pursuant to the terms of such plans or programs;
(iv) the Bonus in respect of the fiscal year in which his
termination of employment occurs, prorated by a fraction, the numerator of which
is the number of days from the beginning of the current fiscal year through and
including the date of his termination and the denominator of which is 365, less
any amounts drawn in advance under Section 3 of this Agreement; and
(v) two years of health and welfare benefits from the date of
termination.
With regard to the Stock Options granted to EXECUTIVE under Section 5 of this
Agreement, any Stock Options not assumed or substituted by the surviving
corporation in a transaction resulting in a Change in Control shall become
immediately vested and exercisable.
(b) For purposes of this Agreement, "Change in Control" shall mean the
first to occur of the following events:
(i) the consummation of a plan of liquidation with respect to
EMPLOYER;
(ii) the sale or other divestiture of all or substantially all of
the assets (excluding the sale of assets in the ordinary course of business or
sale and leaseback transactions or other transactions that are primarily
financing transactions) of EMPLOYER or of EMPLOYER and its direct or indirect
majority-owned subsidiaries;
(iii) the acquisition by any person or affiliated group of persons
as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "1934 Act") (other than Monroe Carell, Jr. and members of the
Carell family, related entities, affiliates, and trusts or foundations created
by or for any of the foregoing) of common stock of EMPLOYER so that such person
or affiliated group shall become the beneficial owner, as defined in Rule 13d-3
of the 1934 Act, directly or indirectly, of a majority of the outstanding voting
stock of EMPLOYER; or
(iv) the consummation of a consolidation or merger of EMPLOYER
with another corporation, unless the consummation of such consolidation or
merger would result in the stockholders of EMPLOYER immediately before such
consolidation or merger owning, in the aggregate, more than fifty percent (50%)
of the outstanding voting stock of the surviving entity immediately after such
consolidation or merger.
9.7 Excise Tax Indemnification. If the Internal Revenue Service asserts,
---------------------------
or if EXECUTIVE or EMPLOYER is advised in writing by a "Big Five" accounting
firm, that any payment in the nature of compensation to, or for the benefit of,
EXECUTIVE from the EMPLOYER (or any successor in interest) constitutes an
"excess parachute payment" under section 280G of the Internal Revenue Code,
whether paid pursuant to this Agreement or any other agreement, and including
property transfers pursuant to securities and other employee benefits that vest
upon a change in the ownership of effective control of the EMPLOYER
(collectively, the "Excess Parachute Payments") the EMPLOYER shall pay to
EXECUTIVE, on demand, a cash sum sufficient (on a grossed-up basis) to indemnify
EXECUTIVE and hold him harmless from the following (the "Tax Indemnity
Payment"):
(i) the amount of excise tax under section 4999 of the Internal
Revenue Code on the entire amount of the Excess Parachute Payments and all Tax
Indemnity Payments to EXECUTIVE pursuant to this Section 9.7;
(ii) the amount of all estimated local, state and federal income
taxes on all Tax Indemnity Payments to EXECUTIVE pursuant to this Section 9.7
(determined in each case at the highest marginal tax rate); and
(iii) the amount of any fines, penalties or interest that have
been or potentially will be, assessed in respect of any excise or income tax
described in the preceding clauses (i) or (ii); so the amounts of Excess
Parachute Payments received by EXECUTIVE will not be diminished by an excise tax
imposed under section 4999 of the Internal Revenue Code or by any local, state
or federal income tax payable in respect of the Tax Indemnity Payments received
by EXECUTIVE pursuant to this Section 9.7.
(10) RESTRICTIVE COVENANTS.
10.1. Covenant Not-to-Compete. During the term of this Agreement
-------------------------
and for a period of one (1) year after termination of employment (or one (1)
year after EMPLOYER is granted injunctive relief to enforce the provisions of
this Section, whichever is later), EXECUTIVE shall not, directly or indirectly,
either as an individual for his own account or as a consultant, partner, joint
venturer, employee, agent, officer, director or shareholder, engage in the same
or similar business of EMPLOYER or any of its parents, subsidiaries,
partnerships, joint ventures, affiliates or related companies (collectively
referred to hereinafter as "Affiliated Entities") within fifty (50) miles of the
perimeter of any county or any independent city in which he is rendering or has
rendered services to or for EMPLOYER during the one-year period prior to
termination of his employment.
10.2 Non-solicitation and Other Covenants. During the term of this
--------------------------------------
Agreement and for a period of two (2) years after termination of employment (or
two (2) years after EMPLOYER is granted injunctive relief to enforce the
provisions of this Section, whichever is later), EXECUTIVE shall not, directly
or indirectly, either as an individual for his own account or as a consultant,
partner, joint venturer, employee, agent, officer, director or shareholder:
(i) solicit or attempt to solicit any clients, customers or
landlords of EMPLOYER or any of its Affiliated Entities existing on the date of
EXECUTIVE's termination with the intent or purpose to perform services for such
clients, customers or landlords which are the same or similar to those provided
by EMPLOYER or any of its Affiliated Entities, or encourage or attempt to
encourage any such clients, customers or landlords to not continue or otherwise
modify adversely its business relationship with EMPLOYER or its Affiliated
Entities;
(ii) enter into any lease, sublease, license agreement,
services agreement, option agreement, management or operating agreement relating
to, or otherwise acquire any rights with respect to, any of the parking
facilities managed or operated by EMPLOYER or any of its Affiliated Entities on
the date of EXECUTIVE's termination; or
(iii) engage, hire, solicit or attempt to solicit for the purpose
of hiring or engaging, as an employee, agent, consultant, independent
contractor, or in any other capacity, any of EMPLOYER's or its Affiliated
Entities' employees or consultants.
EXECUTIVE acknowledges and agrees that the provisions of Sections 10 and 11 of
this Agreement are intended to protect EMPLOYER's interest in certain
confidential information and established landlord, client and other contractual
relationships and goodwill and that such provisions are reasonable and valid in
geographical and temporal scope and in all other respects.
(11) CONFIDENTIAL INFORMATION. EXECUTIVE acknowledges and agrees that all
information of a technical or business nature, such as know-how, trade secrets,
business plans, data processes, techniques, financial information, information
regarding clients, customers, landlords, suppliers, consultants, joint venture
partners and employees, contracts, leases, inventions, sales and marketing
concepts, discoveries, formulae, patterns, and devices (collectively, the
"Confidential Information'') acquired by EXECUTIVE in the course of his
employment under this Agreement is valuable proprietary information of EMPLOYER.
EXECUTIVE agrees that such Confidential Information, whether in written, verbal
or model form, shall not be disclosed to anyone outside the employment of
EMPLOYER without EMPLOYER's written consent unless the Confidential Information
has been made generally available to the public through no fault of the
EXECUTIVE.
(12) RETURN OF EMPLOYER PROPERTY. Upon termination of EXECUTIVE's
employment with or without Cause, EXECUTIVE shall immediately return and deliver
to EMPLOYER and shall not retain any originals or copies of any books, papers,
price lists, customer contracts, bids, customer lists, files, notebooks,
computer files, computer hardware or software, or any other documents or
computer records which are EMPLOYER property, which contains Confidential
Information, or which otherwise relate to EXECUTIVE's performance of duties
under this Agreement. EXECUTIVE further acknowledges and agrees that all such
documents and computer records are EMPLOYER's sole and exclusive property.
(13) NOTICE. All notices, demands and communications required, desired or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given on the date received, if delivered personally, or on the third
day after mailing, if sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the parties at the addresses set
forth below or to such other person at such location as either party hereto may
subsequently designate in a similar manner:
EMPLOYER: EXECUTIVE:
Central Parking System, Inc. Hiram A. Cox
2401 21st Avenue South, Suite 200 _________________
Nashville, Tennessee 37212 _________________
Attn: Monroe J. Carell, Jr.
(14) CONSTRUCTION OF AGREEMENT. This Agreement shall be interpreted,
construed and governed by and under the laws of the State of Tennessee without
reference to the choice of law doctrine of such state, and EXECUTIVE
unconditionally submits to the jurisdiction of the courts located in the State
of Tennessee in all matters relating to or arising from this Agreement, except
to the extent that an issue is subject to the arbitration clause set out herein.
a. If any provision or clause of this Agreement or the application
thereof to either party is held to be invalid by a court of competent
jurisdiction, then such provision shall be severed herefrom, and such invalidity
shall not affect any other provision of this Agreement, the balance of which
shall remain and have its intended full force and effect.
b. In the event that the provisions of Sections 10 or 11 of this
Agreement shall ever be deemed to exceed the time or geographical limits
permitted by applicable law, then such provisions shall be reformed to the
maximum time and geographical limits permitted by applicable law.
c. References herein to "Sections" or "Subsections" mean the various
Sections and subsections of this Agreement. The headings and titles of the
Sections of this Agreement are not a part of this Agreement, but are for
convenience only and are not intended to define, limit or construe the contents
of the various Sections. The term "including" means including, without
limitation, unless the context clearly indicates otherwise.
d. If EXECUTIVE defaults in the performance of the covenants,
agreements, or other obligations described in Sections 10 or 11 of this
Agreement, then in addition to any and all other rights or remedies which
EMPLOYER may have against the EXECUTIVE, (i) EXECUTIVE will be liable to and
will pay to EMPLOYER a sum equal to EMPLOYER's court costs and the reasonable
fees of its attorneys and their support staff incurred in enforcing the
covenants, agreements and other obligations set out in Sections 10 or 11 of this
Agreement; and (ii) EMPLOYER shall be entitled to discontinue the payment of the
Termination Amount and to institute an action to recover any portion of the
Termination Amount already paid under this Agreement.
e. EXECUTIVE acknowledges and agrees that it is impossible to measure
completely in money the damages which will accrue to EMPLOYER if EXECUTIVE shall
breach or be in default of the provisions set forth in Sections 10 or 11 of this
Agreement. Accordingly, if any action or proceeding is instituted by or on
behalf of EMPLOYER to enforce any provisions in Sections 10 or 11 of this
Agreement, EXECUTIVE hereby waives any claim or defense thereto that EMPLOYER
has an adequate remedy at law or that EMPLOYER has not been, or is not being,
irreparably injured thereby. The rights and remedies of EMPLOYER pursuant to
this Section are cumulative, in addition to, and shall not be deemed to exclude
any other right or remedy which EMPLOYER may have pursuant to this Agreement or
otherwise, at law or in equity, including, without limitation, the rights and
remedies available to EMPLOYER under Tennessee statutory or common law.
(15) ARBITRATION. EXECUTIVE and EMPLOYER knowingly and voluntarily agree to
submit to binding arbitration any claims, disputes, or controversies arising out
of or relating to this employment relationship or this Agreement, or alleged
breach thereof, including any present or future claim of employment
discrimination by EXECUTIVE under either federal or state law. Although
workers' compensation issues are not within the scope of this provision,
workers' compensation retaliation claims are intended to be arbitrable.
Arbitration shall serve as the exclusive forum for claims described above, with
the exception that EMPLOYER need not submit issues relating to a breach or
threatened breach of Sections 10 or 11 to arbitration.
Any arbitration under this Section must be instituted within the applicable
statute of limitations governing the dispute under state or federal law. The
laws of the State of Tennessee shall govern all issues relating to such
arbitration, including but not limited to, the applicability and enforceability
of this arbitration provision, without reference to the choice of law doctrine
of such state. Such arbitration shall be conducted in Nashville, Tennessee (or
such other location designated by EMPLOYER) in accordance with the governing
rules of the Federal Mediation and Conciliation Service ("FMCS") then in effect,
except for any rule in conflict with this Section. If for any reason FMCS
cannot provide a panel from which to select an arbitrator, EMPLOYER may utilize
any other arbitrator selection services, including the American Arbitration
Association. One arbitrator shall be selected, using an alternating-strike
method, from a list of arbitrators provided by FMCS. EXECUTIVE and EMPLOYER
will have the right of representation of their own choosing at such hearing as
well as the right to present and cross examine witnesses and to submit relevant
evidence. Both parties shall have the right, unless waived at the hearing, to
file a post-hearing brief and the selected arbitrator shall not limit this
right. Judgment may be entered on the arbitrator's award in any court of
competent jurisdiction.
The arbitrator shall have full and complete power to settle any claim presented,
including any federal or state claim of employment discrimination or retaliation
by EXECUTIVE, and to fashion an appropriate remedy. However, the arbitrator
shall not have the power to amend or modify this Agreement. In any dispute
concerning the termination of EXECUTIVE, the arbitrator may not award
reinstatement or any other remedy unless he or she determines that EMPLOYER was
not entitled to terminate EXECUTIVE under this Agreement. Fees and costs for
the arbitration will be split equally between the parties; however, each party
will be responsible for their own attorney's fees.
(16) ENTIRE AGREEMENT. This Agreement contains the entire agreement between
the parties hereto with respect to the subject matter hereof, and there are no
understandings, representations or warranties of any kind between the parties
except as expressly set forth herein.
12/21/01 Page 17
(17) NO ORAL NOTIFICATION. This Agreement may not be modified except by a
writing duly signed by both parties hereto.
(18) NO ASSIGNMENT. Neither this Agreement nor any right or obligation of
EXECUTIVE hereunder may be assigned by EXECUTIVE without the prior written
consent of EMPLOYER. Subject thereto, this Agreement and the covenants and
conditions herein contained shall inure to the benefit of and shall be binding
upon the parties hereto and their respective successors and permitted assigns.
(19) All references herein to payment or sums of money shall mean in U.S.
currency only. All references herein to calendar year, month, week or day shall
mean the calendar and parts thereof as observed in the U.S. All references
herein to date and time shall mean the date and time in Nashville, Tennessee.
(20) This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which shall constitute one and the
same agreement.
(21) The waiver by either party of a breach or default by the other party of
any provision of this Agreement shall not operate or be construed as a waiver of
any other, continuing or subsequent breach or default by such party.
WITNESS our hands the day and date first above written.
EMPLOYER: EXECUTIVE:
CENTRAL PARKING SYSTEM, INC.
/s/ Hiram A. Cox
-------------------
Hiram A. Cox
By: /s/ William J. Vareschi, Jr.
--------------------------------
Title: Vice Chairman and Chief Executive Officer
----------------------------------------------
EXHIBIT 10.1 (N)
CENTRAL PARKING CORPORATION
DEFERRED STOCK UNIT PLAN
SUMMARY OF PLAN CHANGES
- --------------------------
The "automatic" deferral of 10% of total compensation has been eliminated.
Participation is strictly voluntary.
The threshold (minimum level) for participation has been lowered to 5% of
participant's total cash compensation (base and bonus).
You have the option of deferring a percentage of base salary, bonus, or a
combination (whichever form of compensation is deferred, the threshold of 5% of
total compensation must be met).
Deferrals are deducted from base salary and bonus draw (if applicable) on a
paycheck-by-paycheck basis throughout the year. If you elect to defer only from
bonus and no "draw" is taken, the deferral deduction is made at the time the
bonus is paid (December 15).
For deferrals during the year (base pay and bonus draw), Deferred Stock
Units (DSUs) will be credited monthly based on the closing stock price on the
-------
last trading day in the month.
For deferrals from bonus paid on December 15, DSUs will be credited based
on the average of the twelve monthly stock prices used to credit DSUs during the
------------------------------------------
fiscal year.
The company will match deferrals beginning with the first dollar deferred
---------------------
into the plan as follows:
- - The first 20% of total compensation will be matched at a rate of 25%.
- - Deferrals in excess of 20% of total compensation will be matched at a rate
of 50%.
As before, the company match will be in the form of premium DSUs that vest, on a
pro rata basis, over a four-year period.
Shares of Central Parking Common Stock equal in amount to the DSUs credited
to your account will be purchased in the open market on a monthly basis and will
be held in a trust for the benefit of participants.
All payouts under the plan will be in shares of Central Parking Common
Stock.
Participants will receive quarterly statements.
SUMMARY OF OTHER KEY PROVISIONS
- -----------------------------------
Participants may defer up to 50% of total cash compensation into the plan.
Amounts deferred into the plan are "pre-tax" and Federal income taxes on
account balances are deferred until your account balance is paid out.
Your account is credited with dividend equivalents at the time dividends
are paid on the company's common stock.
Amounts deferred under the plan are paid out upon the earliest to occur of
the following:
- - Retirement
- - Death
- - Termination of Employment
- - Change in Control, or
- - Date pre-selected by participant (must be at least four years from date of
----------------------------------------
deferral).
- --------
You may elect to receive payment of your account balance in a lump sum or
semi-annual installments (not to exceed 10).
Premium units are subject to forfeiture in the event a participant violates
his non-compete obligations to the company.
EXHIBIT 10.6
MANAGEMENT AGREEMENT
THIS AGREEMENT, entered into as of __________ day of _____________, 20____,
---------- ------------- ----
between ________________________, a Corporation, herein called "Agent" and
Central Parking System of , Inc. a corporation, herein
called "Manager":
WITNESSETH:
1. Agent hereby contracts with Manager under the terms, conditions, and
provisions hereinafter set out for Manager to operate a certain Parking Facility
located in _____________________, known as ___________________, which will
-------------------
hereinafter be referred to as the "Parking Facility".
2. The term of this contract shall commence on ______________________, and
----------------------
shall continue in effect for a period of months from said date.
3. The Parking Facility is to be operated by Manager as a commercial parking
garage, and shall be used for no other purpose without prior written approval of
Agent.
4. Manager agrees to set aside the necessary space to protect any
commitments made to the tenants of, or in connection with, the operation of the
_______________________________, and Manager agrees to honor any allocations of
- -------------------------------
space that Agent deems necessary; and Manager agrees to operate the Parking
Facility in a manner consistent with satisfying as efficiently as possible the
parking demands generated by .
5. This Agreement shall not be assigned nor subcontracted in whole or in
part without the written consent of Agent.
6. Gross Revenues, Operating Expenses, and Operating Surplus are defined as
follows:
(a) "Gross Revenues" shall include all revenues received by Manager or Agent
(excluding all sales taxes or other charges required to be remitted to any
governmental agency), and the value of all discounted, validated and free
parking granted by Agent from the parking of vehicles in the Parking Facility,
as well as income from vending machines, pay telephone commissions, and other
income approved by Agent. Any revenues collected directly by Agent shall be
accurately reported to Manager.
(b) "Operating Expenses" shall include all ordinary direct expenses of
operating the Parking Facility other than those of a capital cost nature and
those defined in paragraph (c) herein, including, without restricting, the
generality of the foregoing:
1) Wages of supervisory personnel assigned to the Parking Facility,
attendants, cashiers, clerical and audit staff including monetary fringe
benefits such as workers' compensation insurance at the State manual rate for
parking attendants, unemployment insurance, social security, hospital and
sickness insurance, and pension costs;
2) Telephone expenses;
3) Business taxes, other than franchise taxes on income or profits;
4) License and permits;
5) Advertising and promotion costs;
6) Insurance to the extent required of Manager in this Agreement;
7) Sundry items such as uniforms, tickets and janitorial supplies;
8) Payroll processing and accounts receivable processing expense;
9) Voluntary settlement of patrons' claims for vehicle damage or loss of
contents provided that the same has been authorized by Agent and approved by
Manager;
10) Normal maintenance and repairs of the Parking Facility including snow
removal, repainting of stall markings, replacement or repair of signs and ticket
dispensing equipment;
11) Legal or audit charges directly attributable to the operation of the
Parking Facility other than those performed by the staff of Agent or Manager if
approved in advance by the Agent;
12) The costs of special audits to be performed from time to time by
Manager's staff auditor for the mutual benefit of Agent and Manager; provided,
however, that the time and manner of the taking of the audit is approved by
Agent in advance. Costs qualifying as Operating Expense shall be limited to a
mutually agreed upon per diem rate and actual out-of-pocket expenses of the
auditor during the period of an approved special audit;
13) Payment of the "deductible" amount of insurance claims settlement, and
payment of claims in excess of policy limits;
(c) Certain costs are specifically excluded from the definition of Operating
Expenses for the purpose of this Agreement and shall be borne by the respective
parties. The expenses of the Manger are those set forth in Schedule A. The
expenses of the Agent are those set forth in Schedule B.
(d) "Operating Surplus" shall be defined as "Gross Revenues" less "Operating
Expenses."
(e) Manager shall provide consulting and advisory services to Agent
concerning the Parking Facility without additional charge except for
reimbursement of out-of-pocket expenses such as postage, printing and supply
charges, phone charges, drafting expenses in connection with the performance of
services requested or required by Agent, and any other similar out-of-pocket
expenses. Such expenses shall be supported by cash receipts or other
documentary proof of payment.
7. Manager covenants that it will collect or cause to be collected all of
the gross receipts from the operation and use of the Parking Facility. The
gross receipts for each month's operation shall thereafter, on or before the
twentieth (20th) day of the succeeding month, be disbursed by Manager as
follows:
(a) Manager shall pay all Operating Expenses,
(b) Manager shall then pay to itself out of the Gross Revenue the following
amount:
For each month commencing with the date of this Agreement a minimum monthly fee
of , plus an amount equal to percent
(_____________%) of monthly Operating Surplus, in excess of
________________________.
-----
(c) After payment of the amounts as directed in (a) and (b) above, the
balance of the Operating Surplus shall be paid to Agent monthly in conjunction
with Manager's monthly report to Agent listing Gross Revenues and Operating
Expenses generated by the Parking Facility in the preceding calendar month
("Monthly Report"). The Monthly Report is to be submitted by Manager for each
month of the term hereof by the twentieth (20th) day of the next succeeding
calendar month.
(d) If the Gross Revenues for any month are insufficient to make the
payments required under subparagraphs (a) and (b) above, Agent agrees to remit
to Manager the amount of such deficit within ten (10) days after receipt of
Manager's report. In the event Agent fails to reimburse Manager within said ten
(10) day period, and Agent does not remedy such failure within five (5) days of
receipt of written notice from Manager, then Manager shall have the right to
terminate this Agreement with immediate effect.
(d) <ALTERNATIVE> Upon execution of this Agreement, Agent shall deposit
with Manager an "Operating Advance" equal to three (3) months of estimated
Operating Expenses ($________). The Operating Advance shall be used by Manager
to pay the monthly Operating Expenses. Agent shall remit to Manager the amount
of Operating Expenses disbursed by Manager in the preceding month within ten
(10) days after receipt of each Monthly Report. In the event Agent fails to
reimburse Manager within the ten (10) day period, and Agent does not remedy such
failure within five (5) days of receipt of written notice from Manager, then
Manager shall have the right to terminate this Agreement with immediate effect.
Upon termination of this Agreement, Manager shall return to Agent the remaining
balance of the Operating Advance after payment of all Operating Expenses.
8. Manager agrees to operate the Parking Facility in an efficient manner and
to operate same on all days and at all hours customary in the trade commensurate
with parking demand in the area and such operation shall be continuous, as
herein provided, unless Agent shall otherwise agree in writing. Manager further
agrees that charges for parking in the Parking facility will be commensurate
with the demand for parking space and in accord with existing parking rates in
the area and such rates shall not be varied without written approval of the
Agent.
9. Manager agrees that it will keep records for one (1) year of Gross
Revenue and Operating Expenses pertaining to the operation of the Parking
Facility.
10. It is understood and agreed that Agent in no event shall be construed to
be a partner or associate of Manager in the operation of the Parking Facility or
the conduct of Manager's business thereon, nor shall Agent be liable for any
debts incurred by Manager.
11. Agent agrees to maintain the sidewalks and curb cuts adjacent to the
Parking Facility in accordance with applicable municipal statutes. Agent shall
also be responsible for all Parking Facility repairs of a structural nature
including, but not limited to: electrical, plumbing, pavement repair, painting
of the structure, replacement of all mercury or sodium lighting tubes and
ballasts, repairs to the walls and floors of the Parking Facility, sinkholes,
and maintenance of ventilation system and elevators. Manager agrees to use
reasonable diligence in the care and protection of the Parking Facility during
the term of this Agreement and to surrender the Parking Facility at the
termination of this Agreement in as good condition as received, ordinary wear
and tear and other casualty excepted.
Any structural, mechanical, electrical or other installations or any alterations
required by statutes or regulations pertaining to air quality, environmental
protection, provisions for persons with disabilities or other similar
governmental requirements shall be the sole responsibility of Agent.
12. Upon completion of the initial term of this Agreement, and again on
every subsequent anniversary date, this Agreement shall be automatically renewed
for additional one-year periods, unless either party shall give written notice
to the other, at least sixty (60) days prior to the expiration of the initial
term or any renewal hereof, that the Agreement shall not be so extended.
13. In the event Manager shall intentionally fail to fully and faithfully
deposit all the receipts from the operation of the Parking Facility or shall
intentionally fail to disburse same only in the manner provided for herein, or
in the event Manager shall become bankrupt or insolvent, or suffer the
appointment of a receiver, or make an assignment for creditors, Agent shall have
the right to forthwith terminate this Agreement, regain immediate possession of
the Parking Facility, and hold the Manager liable for any damages resulting to
Agent.
14. Manager agrees to keep the Parking facility at all times in clean,
presentable and sanitary condition and not to permit anything thereon which
would vitiate any insurance carried by Agent on the Parking Facility. Manager
further agrees to comply with all governmental laws, ordinances and regulations
pertaining to the conduct of Manager's business thereon.
15. Manager agrees to carry public liability insurance in such amounts as
shown below, to pay all the premiums thereon when due, and to cause such
insurance to name the Agent as additional insured thereunder (with respect to
Manager's operations only).
Commercial General Liability $1,000,000 combined single limit each
occurrence for bodily injury and property damage.
Umbrella Excess Coverage $10,000,000
Garagekeeper's Legal Liability $10,000,000 combined single limit each
occurrence
Crime: Policy Limits: $50,000 commercial blanket
$50,000 broad form money inside
$50,000 broad form money outside
Workers' Compensation:
Policy Limits: Coverage A - Statutory
Coverage B - $100,000
Agent shall obtain and maintain liability insurance on elevators in the Parking
Facility naming Agent and Manager as insured.
Agent shall obtain fire and extended coverage insurance covering the Parking
Facility and the equipment contained therein.
All insurance coverages are subject to a deductible amount not to exceed
$2,500.00, except Workers' Compensation which deductible shall be $0, and
insurance for stolen vehicles, which deductible shall be $5000, and that the
payment of the deductible amount will be considered an Operating Expense of the
Parking Facility. Any losses not covered by the above insurance shall
constitute expenses of the Agent.
16. Manager shall defend, indemnify and hold Agent harmless from and against
any and all actions, costs, claims, losses, expense and/or damages, sustained by
Agent attributable to the recklessness, carelessness, or negligence of Manager
or any of its agents, servants or employees from any cause, including, without
limitation by specification, property damage and/or injury or death to any
person or persons. Agent shall defend, indemnify and hold Manger harmless from
and against any and all actions, costs, claims, losses, expense and/or damages,
sustained by Manager attributable to the recklessness, carelessness, or
negligence of Agent or any of its agents, servants or employees from any cause,
including, without limitation by specification, property damage and/or injury or
death to any person or persons.
It is agreed that any actions, costs, claims, losses, expenses, and/or damages
resulting from design or structural faults or defects are the responsibility of
Agent.
Agent expressly acknowledges that the Manager's obligations in connection with
the management, operation and promotion of the Parking Facility, and employment
of persons in connection therewith, do not include the rendition of service,
supervision, or furnishing of personnel in connection with the personal safety
and security of employees, tenants, customers, or other persons within and about
the Parking Facility. Manager does not have knowledge or expertise as a guard
or security service, and does not employ personnel for that purpose, nor do
Manager's employees undertake the obligation to guard or protect customers
against the intentional acts of third parties. Agent shall determine, at
Agent's discretion, whether and to what extent any precautionary warnings,
security devices, or security services may be required to protect patrons in and
about the Parking Facility. Agent further agrees to indemnify and to hold
harmless Manager from and against any claims, demands, suits, liabilities, or
judgments arising from Manager's alleged failure to warn, to guard, or to
protect persons in or about the Parking Facility from and against intentional
threats, harm, or injury, except for such threats, harm or injury intentionally
committed by Manager or Manager's employees.
Agent agrees to reimburse Manager for any expense or cost the latter incurs in
defense of any claim, action, proceeding or charge against Manager or Agent
jointly or severally arising out of or based upon any law, regulation,
requirement, contract or award relating to hours of employment, working
conditions, wages and/or compensation of employees or former employees of
Manager at the Parking Facility, provided Manager is not found to be at fault.
It is agreed that any judgments, awards or settlements arising out of such
claims, actions, proceedings or charges that represent wage payments are to be
treated as Operating Expenses.
[OPTIONAL-FOR MULTI-STORY FACILITIES]
It is understood and agreed that the Parking Facility is burdened with pipes,
conduits, and lines necessary for utility services to Agent's building. Agent
does hereby agree to save harmless, protect, and indemnify Manager from and
against any and all liability, claims, causes of action, and costs, including
loss of revenue by Manager, arising from, out of, or because of, the existence
of pipes, conduits, and lines in the Parking Facility unless the same shall
result from negligent actions of Manager, its servants, agents, or employees.
[OPTIONAL-FOR HOTEL VALET]
It is understood and agreed that certain customers may wish to leave their
automobiles in the charge of the hotel doorman rather than having said vehicles
parked by the valet service to be provided by Manager. Any loss of or damage to
vehicles left with the hotel doorman will be the responsibility of Agent. The
Agent will be responsible for cars that are in the front drive that are not to
be parked in the Parking Facility or for which a claim ticket has not been
issued. Customer cars that are parked in the Parking Facility are to be the
responsibility of the Manager from the time they arrive at the front drive until
the time they are returned to the customer. Furthermore, Manager will be
responsible for vehicles for which a ticket has been issued or which are to be
parked by Manager in the Parking Facility.
The party responsible for loss of or damage to vehicles as outlined above will
be responsible for handling the defense of both the Manager and Agent in the
event of any claim being presented based upon loss of or damage to customer
vehicle.
17. Agent for itself and on behalf of the Agent of the Parking Facility does
hereby waive all rights of recovery, if any, against Manager for damage to, or
destruction of, the Parking Facility in the event such damage or destruction is
caused by fire or other casualty which can be covered under a standard fire and
extended coverage insurance policy.
18. Either party shall have the right to terminate this Agreement in the
event the other party has failed to perform any of the terms and conditions
specified herein, if said failure has been called to the attention of the
responsible party in writing via certified mail and that party has not corrected
said failure within thirty (30) days of receipt of written notice (except as is
provided in paragraphs 7(d). In the event of such termination, Manager agrees
to vacate the Parking Facility by midnight of the thirtieth (30th) day after
delivery of said notice. In the event a suit is brought as a result of a
default or breach of this Agreement, the prevailing party will be entitled to
recover its reasonable attorneys' fees and expenses from the other party.
19. Agent shall have the right to enter and inspect the Parking Facility at
all reasonable times.
20. Agent and Manager agree that, during the term of this Agreement, all
personnel employed by Manager to operate the Parking Facility shall be solely
the employees of Manager and shall have no contractual relationship with Agent.
In addition, Agent agrees, during the term of this Agreement, that it will not
enter into any negotiations, communications, or other actions which have as
their intended consequence to induce any such person employed by Manager to
enter the employ of Agent, in any capacity whatsoever.
21. Notwithstanding all provisions of this Agreement, it is mutually
understood between the parties hereto, that this Agreement shall not in any way
be construed to be a lease, but is merely a recitation of contract provisions.
22. Notice to both Agent and Manager shall be sent by certified mail, return
receipt requested, to the following addresses:
If to Agent:
_____________________
_____________________
_____________________
If to Manager:
Monroe J. Carell, Jr.
Chairman & CEO
Central Parking System, Inc.
2401 21st Avenue South
Suite 200
Nashville, TN 37212
IN WITNESS WHEREOF, Agent has caused this instrument to be executed in its
corporate name by its duly authorized officer, and Manager has hereunto set his
hand the day and date first above written.
ATTEST: AGENT:
___________________________
___________________________
By: By:
ATTEST: MANAGER:
CENTRAL PARKING SYSTEM OF
_____________________, INC.
By: By:
Monroe J. Carell, Jr.
Chairman and CEO
APPROVED:
SCHEDULE A
EXPENSES OF MANAGER
-------------------
1. Salaries, travel and accommodation expenses of all executive personnel of
Manager.
2. General and administrative expenses of Manager not allocable directly to
operations at the Parking Facility.
3. Personal property taxes of Manager's property.
SCHEDULE B
EXPENSES OF AGENT
-----------------
1. Real and personal property taxes of Agent's property.
2. All claims, expenses and/or damages arising from, or caused by structural
or design deficiencies or by improper work or supervision during construction
including, without limitation, settlement, collapse or inadequacy of structure
or equipment, and all repairs related thereto.
3. Debt service with respect to land, building and equipment.
4. Costs of legal and auditing fees of Agent.
5. Salaries and wages of all employees of Agent.
6. Costs incurred by Agent in the supervision of obligations of Manager.
7. Costs of maintaining elevators, sprinkler and ventilation systems.
8. Utilities expense of the Parking Facility.
9. Capital expenditures, improvements, alterations, additions and all new
equipment, including all architectural and engineering fees in connection
therewith.
10. Costs of payroll and equipment of security personnel.
11. Cost of premiums for fire and extended coverage insurance.
EXHIBIT 10.7
LEASE AGREEMENT
This Lease Agreement (hereinafter referred to as the "Lease") is made and
entered into this ______ day of _____________, 20___, by and between
____________________ (hereinafter referred to as "Lessor"), and Central Parking
System of _______________, Inc. a ______________ corporation (hereinafter
referred to as "Lessee").
W I T N E S S E T H:
--------------------
1. DESCRIPTION:
-----------
Lessor hereby leases to Lessee for use as a parking _________ a tract of real
estate known as ________________________________ and located in
______________________________________________, more fully described in Exhibit
A - Legal Description attached hereto, together with all improvements thereon,
and appurtenances thereto, hereinafter referred to as the "Premises".
2. QUIET POSSESSION:
-----------------
Lessor covenants that it has fee simple title to the Premises, and Lessor
covenants and agrees with Lessee that so long as Lessee keeps and performs all
the covenants and conditions to be kept and performed by Lessee, Lessee shall
have quiet, undisturbed and continued possession of the Premises, free from all
claims of any kind, nature or description.
3. TERM:
----
This Lease shall commence on _________________ and continue for a period of
__________ years through ________________.
<OPTIONAL> In the event this Lease is terminated for any reason prior to
_______, Lessor shall pay to Lessee the unamortized portion of any capital
improvements approved by Lessor and made by Lessee to the Premises.
<OPTIONAL TO END OF PARAGRAPH> If Lessee shall have complied with all the
provisions of this Lease, it shall have an option to renew the term of this
Lease for an additional period of ___________ years on the same terms and
conditions, providing that Lessee shall notify Lessor in writing not less than
sixty (60) days prior to the expiration of the initial ________ year term hereof
of Lessee's intention to renew this Lease.
4. RENTAL:
------
A. GUARANTEED RENT - Lessee covenants and agrees to pay Lessor an annual
rental of ____________________________ in equal, advance monthly payments of
________________ on the fifteenth day of each month during the term of this
Lease. The rent shall be prorated for any partial month at the beginning or end
of the term hereof.
<OPTIONAL>In the event the federal minimum wage amount as set by the Fair Labor
Standards Act, as amended, is increased during the term hereof, then the monthly
rental payment payable hereunder shall be reduced by the amount of such hourly
increase to the extent such increased minimum wage exceeds $5.15 per hour plus
the actual employer paid taxes on the increase multiplied by the average number
of hours worked monthly on the Premises during the immediately preceding three
(3) months.
B. PERCENTAGE RENTAL - Lessee covenants and agrees to pay to Lessor as rent
for each month of the term of this Lease a sum equal to ________ percent (____%)
of all Gross Parking Revenue, as that term is hereinafter defined, payable by
the fifteenth day (15th) of the next succeeding calendar month. (Use Gross
Parking Revenue definition given below.)
<OPTIONAL>In the event the federal minimum wage amount as set by the Fair Labor
Standards Act, as amended, is increased during the term hereof, then the rent
payable hereunder shall be reduced by an amount equal to _______ percent (___%)
of the following sum: the amount of such hourly increase to the extent the
increased minimum wage exceeds $5.15 per hour plus the actual employer paid
taxes on the increase multiplied by the number of hours worked by Lessee's
employees on the Premises during the month for which said rent is payable.
GUARANTEE PLUS PERCENTAGE - Lessee shall pay to Lessor a minimum annual rental
in the sum of ________________ which shall be payable at the rate of _____ per
month in advance commencing on the fifteenth (15th) day of the Lease term and
continuing through the fifteenth day of each month thereafter.
Plus: Lessee shall pay to Lessor annually within sixty (60) days of the end of
each Lease Year (as that term is hereinafter defined) an amount equal to
________ percent (______%) of Gross Parking Revenue, as that term is hereinafter
defined, collected by Lessee in the operation of a parking facility on the
Premises in excess of $______________ per Lease Year (which amount will
hereinafter be referred to as the "Percentage Rental Threshold"). The term
"Lease Year" is defined as being the twelve (12) month period beginning on the
first day of the first full calendar month during the term hereof and each
successive twelve (12) month period commencing on the same calendar date each
year of the term hereof. For any partial Lease Year, the Percentage Rent
Threshold will be adjusted on a prorated basis and the percentage rent payment
for such partial Lease Year will be due within sixty (60) days of the final day
of such partial Lease Year.
Gross Parking Revenue as used in this Lease shall mean all revenues received and
collected by Lessee in the operation of the Premises less any sales tax, parking
tax, license fee, levy, impost, or other charge which may be required by law,
ordinance or other governmental regulation to be:
i. collected from patrons of the Premises, or
ii. imposed on the parking spaces or stalls on the Premises (excluding ad
valorem taxation of the Premises), or
iii. collected from vehicles entering the Premises
and to be remitted to a political subdivision or other agency (without regard to
legality, constitutionality or enforceability of such law, ordinance or other
government regulation).
Lessee shall submit to Lessor no later than the sixtieth (60th) day after the
expiration of each Lease Year a verified report showing Gross Parking Revenue
and a calculation of the total percentage rental for the Lease Year previously
ended. At the time of submitting such report, Lessee shall pay to Lessor the
percentage rental shown to be due on such report.
Lessee shall maintain suitable books of account at its regular business office
in ____________________ and such books as to each year shall be available for
inspection and audit by Lessor or its agent at any reasonable time within one
year after the expiration of each respective Lease Year.
In the event the federal minimum wage amount as set by the Fair Labor Standards
Act, as amended, is increased during the term hereof, then the Percentage Rental
Threshold shall be increased by an amount equal to the amount of such hourly
increase to the extent the increased minimum wage exceeds $5.15 per hour plus
the actual employer paid taxes on such increase multiplied by the number of
hours worked by Lessee's employees on the Premises during said year after such
increase.
5. MAINTENANCE AND REPAIR:
------------------------
Lessee agrees to use reasonable diligence in the care, protection and
maintenance of the Premises during the term of this Lease, and to surrender the
Premises at the termination of this Lease in as good condition as received,
ordinary wear and tear and casualty damage excepted.
Subject to Lessee having obtained all requisite governmental approvals and
permits, Lessee at Lessee's expense shall have the right to do any or all of the
following: install and alter driveways, curbcuts, and paving, and plant and
remove trees and shrubs, all as Lessee deems appropriate or necessary to its use
of the Premises.
Lessee shall have no obligation with respect to the condition, maintenance, or
repair of any of the sidewalks which may be adjacent to or adjoin the Premises
except as and to the extent damaged by Lessee or its employees in its use of the
Premises; Lessor, at Lessor's expense, agrees to promptly make all repairs to
such sidewalks required by law or public safety except Lessee, at Lessee's
expense shall make all repairs thereto for damage resulting from its use of the
Premises. Lessee shall have no obligation to repair any sinkholes except and to
the extent caused by Lessee.
<OPTIONAL> Lessee will have the right to erect on the Premises a coin collection
box and professional parking signs as long as its signs do not violate city
ordinances.
<GARAGE> Lessor shall also be responsible for all garage repairs of a structural
nature, including, but not limited to: electrical, plumbing, pavement repair,
painting of the structure, replacement of all mercury or sodium lighting tubes
and ballasts, repairs to the walls and floors of the garage, and maintenance of
ventilation system and elevators.
6. ALTERATIONS AND IMPROVEMENTS:
------------------------------
Lessee may, with approval of Lessor, which shall not be unreasonably withheld,
make alterations and improvements, including the installation of appropriate
signage, at Lessee's expense, to the Premises as may be required for the purpose
of Lessee's business; provided, however, that Lessor, upon the expiration of
this Lease, may require Lessee to restore the Premises as nearly as possible to
its condition at the beginning of the Lease, ordinary wear and tear and other
casualty excepted, by giving written notice to Lessee not later than thirty (30)
days before the expiration of this Lease or any extension thereof.
Lessee may (if not in default hereunder) prior to the expiration of the Lease or
any extension thereof, remove all fixtures and equipment which have been placed
on the Premises by Lessee.
7. USE OF PREMISES:
-----------------
The Premises shall be used by Lessee for the purpose of operating a parking
_____________ for use by the general public, and for the sale of such
merchandise and services as are ancillary to the operation of a parking
____________, including, but not limited to, vending machines and advertising
media.
The Premises shall not be used for any illegal purpose, nor in any manner to
create any nuisance, or trespass.
8. INSURANCE:
---------
Prior to commencement, and during the term of this Lease, Lessee agrees to
maintain the following types of insurance with limits not less than those set
forth below and to have Lessor included as additional insured with respect to
Lessee's operation of the Premises:
Commercial General Liability $1,000,000 combined single limit each
occurrence for bodily injury and property damage.
Umbrella Excess Coverage $5,000,000
Garagekeeper's Legal Liability $5,000,000 combined single limit each
occurrence
Crime: Policy Limits: $10,000 commercial blanket
$10,000 broad form money inside
$10,000 broad form money outside
Workers' Compensation: Coverage A - Statutory
Coverage B - $100,000
9. WAIVER OF SUBROGATION:
-----------------------
Lessor does hereby waive all rights of recovery, if any, against Lessee for
damage to, or destruction of, the Premises in the event such damage or
destruction is caused by fire or other casualty which may be covered by a
standard fire and extended coverage insurance policy.
10. ASSIGNMENT AND SUBLETTING:
---------------------------
Lessee shall not assign this Lease in whole or in part, or sublet all or any
part of the Premises without the prior written consent of Lessor in each
instance, which consent will not be unreasonably withheld.
11. DEFAULT:
-------
In the event Lessee fails to pay any installment of rent when due and such
failure is not cured within ten (10) days after receipt of written notice of
such failure by Lessor to Lessee by registered or certified mail or in the event
of a material default in the performance by Lessee of any condition herein
contained, and such default is not cured within thirty (30) days after receipt
of written notice of such default by Lessor to Lessee by registered or certified
mail, or such additional time as is reasonably necessary to cure the default,
then, in any such case, Lessor may: (1) serve written notice upon Lessee that
Lessor elects to terminate this Lease upon a specified date not less than thirty
(30) days after such written notice and this Lease shall then terminate on that
date so specified, and Lessor shall have the right to re-enter, repossess, or
re-rent the premises upon such date or (2) cure the default and invoice Lessee
for all costs incurred by Lessor to cure the default, in which case this Lease
shall continue in full force and effect if Lessee pays the costs of cure within
15 days following receipt of the invoice from Lessor. If Lessor shall at any
time fail to perform any of the covenants, conditions, or provisions of this
Lease, and such default is not removed within thirty (30) days after receipt of
written notice thereof from Lessee or such additional time as is reasonably
necessary to cure the default, then, in any such case, Lessee may: (1) serve
written notice upon Lessor that Lessee elects to terminate this Lease upon a
specified date, not less than thirty (30) days after such written notice, and
this Lease shall then terminate on the date so specified or (2) cure the default
and setoff the cost of cure against Lessee's next payment(s) of rent in which
case this Lease shall continue in full force and effectNo default shall be
deemed waived unless such waiver be in writing.
12. INDEMNITY:
---------
Lessee shall defend, indemnify and hold Lessor harmless from and against any and
all actions, costs, claims, losses, expenses and/or damages sustained by Lessor
attributable to the recklessness, carelessness or negligence of Lessee or any of
its agents, servants, or employees from any cause, including, without limitation
by specification, property damage and/or injury or death to any person or
persons. Lessor shall defend, indemnify and hold Lessee harmless from and
against any and all actions, costs, claims, losses, expenses and/or damages
sustained by Lessee attributable to the recklessness, carelessness or negligence
of Lessor or any of its agents, servants or employees from any cause, including,
without limitation by specification, property damage and/or injury or death to
any person or persons.
<OPTIONAL-GARAGE TO END OF PARAGRAPH> It is agreed that any actions, costs,
claims, losses, expenses and/or damages resulting from design or structural
faults or defects are the responsibility of Lessor. It is understood and agreed
that the Premises are burdened with pipes, conduits, and lines necessary for
utility services to Lessor's building. Lessor does hereby agree to save
harmless, protect, and indemnify Lessee from and against any and all liability,
claims, causes of action, and costs, including loss of revenue by Lessee,
arising from, out of, or because of the existence of pipes, conduits, and lines
on the Premises unless same shall result from negligent actions of Lessee, its
servants, agents or employees.
13. INTERFERENCE WITH USAGE:
-------------------------
If due to war, or a valid order of a governmental agency, restrictions are
placed on the use of automobiles or trucks for civilian use, or gasoline usage
is restricted by governmental agency through rationing or other restrictions for
a continuous period of sixty (60) days, or the flow of traffic is interrupted on
_____________________, within one (1) block of the entrance to the Premises for
a period in excess of seven (7) business days, then the annual rental under
Paragraph 4 hereof shall be abated only during the period of such restrictions
or interruptions and Lessor shall receive _____________ percent (____%) of all
net receipts (gross receipts minus parking/sales taxes) for the entire period of
time affected by such restrictions and interruptions. In the event Lessee
exercises its option pursuant to the provisions of this paragraph, either Lessee
or Lessor shall have the right to terminate this Lease by giving thirty (30)
days written notice of such termination.
14. DESTRUCTION OF, OR DAMAGE TO PREMISES:
------------------------------------------
If the Premises are totally destroyed by fire, storm, lightning, earthquake, or
other casualty, and including destruction due to bombing, shelling, or other war
damage, this Lease shall be terminated and the rental accounted for as between
Lessor and Lessee as of that date. If the Premises are damaged but not wholly
destroyed by any such casualty, rental shall abate in such proportion as use of
Premises has been destroyed, or made inaccessible or unusable, and Lessor shall
restore the Premises to substantially the same condition as before damages as
speedily as practicable, whereupon full rental shall recommence.
15. HOLDING OVER:
-------------
If Lessee remains in possession of Premises after expiration of the term hereof,
with Lessor's acquiescence and without any express agreement of the parties,
Lessee shall be a lessee at will at the rental rate in effect at the end of the
Lease; and there shall be no renewal of this Lease by operation of law.
16. TAXES AND ASSESSMENTS:
-----------------------
Lessor will be responsible for payment of all property taxes and special
assessments on the Premises.
17. TERMINATION BY LESSEE:
-----------------------
In the event of the occurrence of any one or more of the following events
(hereinafter "Events of Termination"), Lessee shall have the right to terminate
this Lease upon appropriate notice to Lessor as hereinafter specified:
(a) If any license, franchise, right or privilege to operate an automobile
parking facility on the Premises by Lessee is revoked or suspended for thirty
(30) consecutive days by the City of ____________________, or the governing
authority having jurisdiction over the Premises, and such revocation or
suspension is due to no fault, negligence, or act of omission or commission on
part of Lessee.
(b) The permanent closing to vehicular traffic of any street, drive, or
other vehicular thoroughfare by the City of __________________ or the governing
authority having jurisdiction thereof to which the Premises presently have
vehicular access.
(c) The denial of access by the City of _______________ or the governing
authority having jurisdiction over the Premises to any street, drive or public
vehicular thoroughfare which adjoins the Premises to the extent that the net
receipts generated on the Premises shall be reduced by twenty five (25%) percent
as compared with the net receipts generated during the two calendar months
immediately prior to such alteration or change.
(d) The alteration or change by appropriate legal action by the City of
______________________, or the governing authority having such jurisdiction of
the vehicular traffic pattern or flow in any street, drive, or vehicular
thoroughfare which adjoins the Premises to the extent that the Gross Parking
Revenue generated on the Premises shall be reduced by twenty-five percent (25%)
as compared with the net receipts generated during the two calendar months
immediately prior to such alteration or change.
After the occurrence of any one or combination of the preceding described events
of termination, Lessee shall, at its option, have the right to terminate this
Lease by giving Lessor thirty (30) days written notice of such termination.
18. MISCELLANEOUS PROVISIONS:
-------------------------
It is mutually covenanted and agreed by and between the parties as follows:
That this Lease shall be construed under the laws of the State of
____________________.
That the captions of the Articles of this Lease are inserted for identification
only, and shall not govern the construction, nor alter, vary, or change any of
the terms, conditions, or provisions of this Lease or any Article thereof.
Each provision herein shall be deemed separate and distinct from all other
provisions, and if any one of them shall be declared illegal or unenforceable,
the same shall not affect the legality or enforceability of the other terms,
conditions, and provisions hereof, which shall remain in full force and effect.
Lessor will grant at Lessee's expense whatever easements are reasonably
necessary to provide the utilities for all improvements on or placed on the
Premises and access to the Premises during the term hereof.
Any person, firm or corporation who may acquire an interest in the Premises
leased hereby, or in the improvements thereon, shall take notice of all the
terms and conditions set out herein as well as the covenants referred to herein,
and shall be bound thereby.
This Lease is specifically conditioned upon the ability of Lessee to obtain all
necessary and requisite licenses, permits and/or other authorization from the
applicable city, state, and county authorities having jurisdiction over the
Premises in order to operate an off street automobile parking facility.
Lessee shall pay all utility charges resulting from Lessee's use of Premises.
At the end of the initial or any extended term of this Lease, Lessee shall have
the first right of refusal to match any bona fide offer to lease or buy the
Premises. Lessor shall present any such written offer to Lessee, and Lessee
shall notify Lessor within fifteen (15) days of its intention to match said
offer, or to vacate the Premises.
Any structural, mechanical, electrical or other installations or any alterations
required by statutes or regulations pertaining to air quality, environmental
protection, provisions for persons with disabilities or other similar
governmental requirements shall be the sole responsibility of Lessor.
Notwithstanding any other provision in this Lease, Lessee shall have the right
to terminate the term hereof at any time without any further obligation to
Lessor upon thirty (30) days written notice to Lessor and the payment of six (6)
months fixed rent to Lessor.
In the event that either party institutes legal proceedings to enforce its
rights hereunder, the prevailing party in such legal proceeding shall be paid
all of the costs it incurs, including reasonable attorney's fees.
19. NOTICES:
-------
In the event notices are required to be sent under the provisions of this Lease,
they will be mailed, postage prepaid by certified or registered mail, return
receipt requested, addressed as follows:
Lessor: Lessee:
Monroe J. Carell, Jr.
Chairman
Central Parking System of _____________
2401 Twenty-First Avenue South
Suite 200
Nashville, Tennessee 37212
Either party may, by such notice, designate a new or other address to which
notice may be mailed.
IN WITNESS WHEREOF, the parties hereto have caused their names to be hereto
signed by their duly authorized officer on the date hereinbefore first written.
LESSOR:
ATTEST: ________________________________
________________________________
________________________ BY: ____________________________
LESSEE:
ATTEST: CENTRAL PARKING SYSTEM OF
__________________________, INC.
_________________________ BY:______________________________
William J. Vareschi,
CEO
APPROVED: ________________________
EXHIBIT A
LEGAL DESCRIPTION
Exhibit 10.16
August 13, 2001
TO THE LENDERS UNDER THE CREDIT AGREEMENT
Re: Credit Agreement dated as of March 19, 1999 (as amended, modified and
restated, the "Credit Agreement") among Central Parking Corporation, Central
Parking System, Inc., Central Parking System Realty, Inc., Central Parking
System of Massachusetts, Inc., CPC Finance of Tennessee, Inc., Kinney System of
Sudbury St., Inc., and Allright Holdings, Inc. (the "Borrowers"), the Guarantors
identified therein, the Lenders identified therein and NationsBank, N.A., a
national banking association now known as Bank of America, N.A., as Agent.
Capitalized terms used but not otherwise defined shall have the meanings
provided in the Credit Agreement.
Ladies and Gentlemen:
At the request of Central Parking, please confirm your agreement to an increase
in the LOC Committed Amount, as referenced and defined in Section 2.3(a) of the
Credit Agreement, from Twenty-Five Million Dollars ($25,000,000) to Forty
Million Dollars ($40,000,000). Please sign and return a copy of this letter
amendment agreement to Kurt Oosterhouse of Moore & Van Allen, PLLC at (704)
378-2017 at your earliest convenience, but in any event by 5:00 p.m. EDT August
23, 2001. This letter amendment agreement will be effective upon our return
receipt of executed consents from the Required Lenders.
Questions may be directed to Kathleen Hebert at (704) 388-4074. Thank you in
advance for your cooperation.
Except as amended or otherwise modified hereby, all of the terms and provisions
of the Credit Agreement and the other Credit Documents shall remain in full
force and effect. This letter agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina. This letter agreement
may be executed in one or more counterparts, each of which constitute an
original, and all of which taken together shall constitute a single document.
Sincerely, ACKNOWLEDGMENT AND CONSENT
----------------------------
BANK OF AMERICA, N.A., _______________AmSouth___________________
as Administrative Agent [Name of Lender]
By: /s/ Fred Wyatt By: /s/ Peter Lee
---------------------------- ------------------------------
Name: Fred Wyatt Name: Peter Lee
Title: Senior Vice President Title: Vice President
EXHIBIT 21
CENTRAL PARKING CORPORATION & SUBSIDIARIES
ENTITY LIST
STATE/COUNTRY
OF INCORPORATION COMPANY NAME
1 AL CENTRAL PARKING SYSTEM OF ALABAMA, INC.
2 AR ALLRIGHT L.R., INC.
3 CA ALLRIGHT CAL., INC.
4 CA KINCAL, INC.
5 CO ALLRIGHT COLORADO, INC.
6 CT KINNEY SYSTEM OF CONNECTICUT, INC.
7 CT KINNEY SYSTEM OF HARTFORD, INC.
8 DC DIPLOMAT PARKING CORPORATION
9 DC KINNEY SYSTEM OF FIFTH ST., INC.
10 DC KINNEY SYSTEM OF WASHINGTON SQUARE, INC.
11 DC KINNEY SYSTEM OF WASHINGTON, INC.
12 DC KINNEY SYSTEM, D.C., INC.
13 DC SARBOV PARKING CORPORATION
14 DE ALLRIGHT CORPORATION
15 DE ALLRIGHT HOLDINGS, INC.
16 DE ALLRIGHT PARKING MANAGEMENT, INC.
17 DE APARKCO FINANCE, INC.
18 DE APARKCO, INC.
19 DE KINNEY PARKING, INC.
20 DE KINNEY SYSTEM OF DELAWARE, INC.
21 DE KINNEY SYSTEM, INC.
22 DE SQUARE 88 CORP
23 DE SQUARE WILMINGTON CORP
24 IL ALLRIGHT PARKING CHICAGO, INC.
25 IN CENTRAL PARKING SYSTEM OF INDIANA, INC.
26 LA ALLRIGHT BATON ROUGE, INC.
27 LA ALLRIGHT SHREVEPORT, INC.
28 MA ALLRIGHT BOSTON PARKING, INC.
29 MA AZURE PROP., INC.
30 MA KINNEY MYSTIC CENTER, INC.
31 MA KINNEY PARKING OF SUFFOLK COUNTY, INC.
32 MA KINNEY SYSTEM OF BOSTON, INC.
33 MA KINNEY SYSTEM OF SUDBURY ST., INC.
34 MD KINNEY SYSTEM OF BETHESDA INC.
35 MI HONOR GUARD SERVICE, INCORPORATED
36 MI NATIONAL GARAGES, INCORPORATED
37 MN ALLRIGHT PARKING MINNESOTA, INC.
38 MO ALLRIGHT CARPARK, INC.
39 NE ALLRIGHT PARKING OMAHA, INC.
40 NJ ALLRIGHT NEW JERSEY, INC.
41 NJ CENTRAL PARKING SYSTEM OF NEW JERSEY, INC
42 NJ KINNEY HOBOKEN AT OBSERVER HIGHWAY, INC.
43 NJ KINNEY INTERNATIONAL INC.
44 NJ KINNEY LOMBARDY STREET, INC.
45 NJ KINNEY LONG BRANCH, INC.
46 NJ KINNEY OF ATLANTIC CITY, INC.
47 NJ KINNEY OF CAMDEN, INC.
48 NJ KINNEY OF NORTHERN NEW JERSEY, INC.
49 NJ KINNEY SYSTEM OF ATLANTIC CITY, INC
50 NJ KINNEY SYSTEM OF NEW JERSEY, INC.
51 NJ SQUARE KENTUCKY CORP.
52 NJ WASHINGTON KINNEY, INC.
53 NV ALLRIGHT SIERRA PARKING, INC.
54 NY 12 WEST 48TH STREET CORP.
55 NY 12 WEST 48TH STREET, LLC
56 NY 22 ANSON PLACE, INC.
57 NY 70 E. 10TH ST. SQUARE CORP.
58 NY ALLRIGHT NEW YORK PARKING, INC.
59 NY ALLRIGHT PARKING BUFFALO, INC.
60 NY ALLRIGHT PARKING NY LLC
61 NY ALLRIGHT PARKING SYRACUSE, INC.
62 NY BLACK ANGUS, LLC
63 NY KINNEY - 40TH ST. INC
64 NY KINNEY - 9TH STREET, INC.
65 NY KINNEY - CIVIC CENTER, INC.
66 NY KINNEY - GUNHILL, INC.
67 NY KINNEY 345 W. 58TH ST., INC.
68 NY KINNEY 360 E. 65TH ST., INC.
69 NY KINNEY 444 TENTH AVE., INC.
70 NY KINNEY DELTA CORP.
71 NY KINNEY EAST 75TH STREET, INC.
72 NY KINNEY JOHNSON AVENUE, INC.
73 NY KINNEY LONDON TERRACES, INC.
74 NY KINNEY METROPOLITAN TOWER, INC
75 NY KINNEY NORTH MOORE STREET, INC.
76 NY KINNEY OF 18TH ST., INC.
77 NY KINNEY OF AMERICA, INC.
78 NY KINNEY OF ARCHER AVENUE, INC.
79 NY KINNEY OF BROOKLYN, INC.
80 NY KINNEY OF LONG ISLAND, INC.
81 NY KINNEY OF MULBERRY ST., INC.
82 NY KINNEY OF ROOSEVELT, INC.
83 NY KINNEY ON 11TH STREET, INC.
84 NY KINNEY PARKING OF 40TH ST., INC.
85 NY KINNEY PARKING OF THE BRONX, INC.
86 NY KINNEY PARKING SYSTEM, INC.
87 NY KINNEY PROMENADE, INC.
88 NY KINNEY SYSTEM EASTSIDE PARKING, INC.
89 NY KINNEY SYSTEM HOLDING CORP.
90 NY KINNEY SYSTEM MANAGEMENT, INC.
91 NY KINNEY SYSTEM OF GREATER NEW YORK, INC.
92 NY KINNEY TOWER, INC.
93 NY KINNEY VALET PARKING, INC.
94 NY KINNEY VARICK BROADWAY, INC.
95 NY KINNEY WEST 83RD ST., INC.
96 NY KINNEY YORK AVENUE, INC.
97 NY LCB PARKING CORP.
98 NY METROPOLITAN KINNEY INC.
99 NY S&M ENTERPRISES, INC.
100 NY SAMPLE PARKING CORP.
101 NY SAS PARKING SERVICES, INC.
102 NY SLATE PARKING CORP.
103 NY SONAR PARKING CORP.
104 NY SPACE PARKING SERVICES, INC.
105 NY SPECIALIZED PARKING SYSTEM, INC.
106 NY SPS PARKING GROUP, INC.
107 NY SPS PARKING SERVICES, INC.
108 NY SQUARE INDUSTRIES, INC.
109 NY SQUARE PLUS OPERATING CORP
110 NY STOP - PARK GARAGE CORP.
111 NY TRIPLE S PARKING SERVICES, INC.,
112 NY VANDERBILT PARKING CORP.
113 PA KINNEY - KENNEDY BOULEVARD, INC.
114 PA KINNEY INDEPENDENCE MALL, INC.
115 PA KINNEY OF PHILADELPHIA, INC.
116 PA KINNEY OF RACE STREET, INC
117 PA KINNEY SYSTEM OF PHILADELPHIA, INC.
118 PA SQUARE PHILADELPHIA CORP
119 PA SQUARE RODMAN CORP.
120 PA SQUARE SANSOM CORP.
121 PA TWELVE WALSAN CORPORATION
122 RI KINNEY SYSTEM OF PROVIDENCE ,INC.
123 TN CENTRAL PARKING SYSTEM - AIRPORT SERVICES, INC.
124 TN CENTRAL PARKING SYSTEM OF ASIA, INC.
125 TN CENTRAL PARKING SYSTEM OF CONNECTICUT, INC.
126 TN CENTRAL PARKING SYSTEM OF FLORIDA, INC.
127 TN CENTRAL PARKING SYSTEM OF GEORGIA, INC.
128 TN CENTRAL PARKING SYSTEM OF ILLINOIS, INC.
129 TN CENTRAL PARKING SYSTEM OF IOWA, INC.
130 TN CENTRAL PARKING SYSTEM OF KANSAS CITY, INC.
131 TN CENTRAL PARKING SYSTEM OF KENTUCKY, INC.
132 TN CENTRAL PARKING SYSTEM OF LOUISIANA, INC.
133 TN CENTRAL PARKING SYSTEM OF MARYLAND, INC.
134 TN CENTRAL PARKING SYSTEM OF MASSACHUSETTS, INC.
135 TN CENTRAL PARKING SYSTEM OF MISSISSIPPI, INC.
136 TN CENTRAL PARKING SYSTEM OF NEW YORK, INC.
137 TN CENTRAL PARKING SYSTEM OF NORTH CAROLINA, INC.
138 TN CENTRAL PARKING SYSTEM OF OHIO, INC.
139 TN CENTRAL PARKING SYSTEM OF OKLAHOMA, INC.
140 TN CENTRAL PARKING SYSTEM OF PENNSYLVANIA, INC.
141 TN CENTRAL PARKING SYSTEM OF PUERTO RICO, INC.
142 TN CENTRAL PARKING SYSTEM OF RHODE ISLAND, INC.
143 TN CENTRAL PARKING SYSTEM OF SOUTH CAROLINA, INC.
144 TN CENTRAL PARKING SYSTEM OF ST. LOUIS, INC.
145 TN CENTRAL PARKING SYSTEM OF TENNESSEE, INC.
146 TN CENTRAL PARKING SYSTEM OF VIRGINIA, INC.
147 TN CENTRAL PARKING SYSTEM OF WASHINGTON, INC.
148 TN CENTRAL PARKING SYSTEM OF WISCONSIN, INC.
149 TN CENTRAL PARKING SYSTEM REALTY OF MISSOURI, INC
150 TN CENTRAL PARKING SYSTEM REALTY OF NEW YORK, INC
151 TN CENTRAL PARKING SYSTEM REALTY, INC
152 TN CENTRAL PARKING SYSTEM, INC
153 TN CPC FINANCE OF TENNESSEE, INC.
154 TN CPS OF THE NORTHEAST, INC
155 TN DENVER BASEBALL STADIUM GARAGE
156 TN LARIMER DEVELOPMENT CORP.
157 TN SHERIDAN HERITAGE DEVELOPMENT CORP.
158 TX ALLRIGHT BEAUMONT COMPANY
159 TX ALLRIGHT PARKING EL PASO, INC.
160 TX ALLRIGHT PARKING SYSTEM, INC.
161 TX ALLRIGHT REALTY COMPANY
162 TX ALLRIGHT SAN ANTONIO PARKING
163 TX CENTRAL PARKING SYSTEM OF TEXAS, INC.
164 VA KINNEY OF NORTHERN VIRGINIA, INC.
165 BRITISH COLUMBIA ALLRIGHT PARK VANCOUVER LTD.
166 CANADA 157166 CANADA, INC.
167 CANADA 811462 ONTARIO, INC.
168 CANADA ALLRIGHT AUTO PARKS CANADA, LTD.
169 CANADA IDEAL PARKING, INC.
170 CHILE ESTACIONAMIENTOS CENTRAL PARKING SYSTEM CHILE LIMTADA
171 CHILE INVERSIONES CENTRAL PARKING SYSTEM LIMITADA
172 CZECH CENTRAL PARKING
173 DE CENTRAL PARKING FINANCE TRUST
174 GERMANY CENTRAL PARKING SYSTEM DEUTSCHLAND GMBH
175 GREECE CENTRAL PARKING SYSTEM ATHENS S.A.
176 GREECE CENTRAL PARKING SYSTEM HELLAS S.A.
177 IRELAND CENTRAL PARKING SYSETM IRELAND LIMITED
178 MEXICO CENTRAL PARKING SYSTEM OF MEXICO, SA De CV
179 MEXICO SERVICIOS CORPORATIVOS PARA ESTACIONAMIENTOS, SA De CV
180 POLAND CENTRAL PARKING SYSTEM POLAND LIMITED
181 SPAIN CENTRAL PARKING SYSTEM ESPANA, S.A.
182 UK CENTRAL PARKING SYSTEM OF THE U.K., LTD
183 UK CONTROL PLUS PARKING SYSTEM OF UK, LTD.
184 VENEZUELA CENTRAL PARKING SYSTEM OF VENEZUELA, S.A.
EXHIBIT 23
ACCOUNTANTS' CONSENT
The Board of Directors
Central Parking Corporation
We consent to the incorporation by reference in the registration statements
(Nos. 33-98118, 33-98120, 33-98122, 333-37909 and 333-74837) on Form S-8 and the
registration statement (No. 333-52497) on Form S-3 of Central Parking
Corporation of our report dated November 26, 2001, with respect to the
consolidated balance sheets of Central Parking Corporation as of September 30,
2001 and 2000, and the related consolidated statements of earnings,
shareholders' equity and comprehensive income, and cash flows for each of the
years in the three-year period ended September 30, 2001, and all related
financial statement schedules, which report is included in the September 30,
2001 Form 10-K of Central Parking Corporation.
KPMG LLP
Nashville, Tennessee
December 21, 2001